An uncle once commented about a cousin of ours that he demonstrated how it's possible to screw things up so badly that you can't possibly recover. I think that's true for Sam. I hope it's not true for the people in his orbit; I hope they can get out from under this and try to find meaning, ideally from repairing the harm they've done.
As Rick Heicklen writes, "We are not ever going to be Sam. But we could be Caroline, or Nishad, or Natalie. Or even Michael Lewis. We could easily make the same mistakes they do." [0]
FWIW, I didn't find Lewis's book as bad (or amoral) as it's often made out to be. Yes, he didn't put his judgement in every paragraph, but his description of SBF was:
a) absolutely damning! SBF's lack of empathy, his notion that (given that everyone else is stupid) he knew best and should basically ignore the advice of everyone else (particularly his elders), his naive utilitarianism without any deontological/virtue temperance, his reckless "many-worlds" risk-neutrality in gambling - that was all described in detail in the book, even if it was not explicitly condemned. Lewis didn't bother to show why these traits are bad. (I don't know what Lewis himself thought about them, but who cares? Show, don't tell.)
b) empathetic, eliciting compassion. Sure, the kid was screwed up, but here's why. And, btw, you might well have turned out the same way under similar circumstances, but for the grace of god.
My conclusion: 1) Lewis's book was good and insightful, and it's unfair to describe it as an apologia. 2) SBF has severe moral deficiencies and belongs in prison for a long time, but not because he is "evil". 3) Let's have some damn humility.
I very much agree. "Number go up" by Faux is the better book in many respects, but Lewis's book contains much background info not reported elsewhere. Lewis's book is damning about SBF as you said. About how unapologetic and manipulative he is. About his willingness to gamble with other people's money. About his complete lack of ethical boundaries. About the casual way SBF ignored all laws he didn't like. About SBF's history of reckless gambling.
Yes, Lewis was (and probably still is) sympathetic to SBF. But that's also how he got him to talk! The book wouldn't have been possible had Lewis behaved as a skeptical investigative journalist. Lewis gave SBF all the rope he needed to hang himself with, and that was all he needed to do.
If you're aware of a financial crime, please report it to the SEC or one of the other financial regulators through their whistleblower hotline. You may be in for a big payday.
If you think the terms are unfair to you, you have the option to not do business with this particular bank. If all banks do the same, have you thought there's a financial reason behind it that you might not be aware of (say, default rate, operational costs, etc).
Selling an expensive product or service is very different from committing fraud or stealing. There are plenty of practices within banking that are a lot more immoral than charging high fees.
For example, payday loans are explicit in saying they will charge you a percentage of your payday for a 14 day loan. But if you do the math, it's about 1000% interest annually
I am aware of at least 2, I'm not in the U.S. , to disclose one crime I'd have to breach confidentiality and the most likely outcome would be that the bank would get a slap in the wrist or even nothing, meanwhile I'd be sued to oblivion and it would ruin my life (the same happens with some other crimes I know about, I once tried an anonymous tip about some grifting in the military and instead of taking it they said they went fully hostile and said they'd trace my call !!).
The other one I didn't have enough proof, apparently someone else did tip the authorities and the shady payday loan company is getting a slap in the wrist. Not exactly something to instill confidence in our justice (and my country is one of the least corrupt ones!)
> Lewis gave SBF all the rope he needed to hang himself with, and that was all he needed to do.
Very nicely put.
Book recommendations: Faux Number go up is beautifully reported, in particular on the many scam and trafficking victims, the culture (Bored Ape parties), some of the players (eg SBF, the Tether people, etc.), and the underlying anarcho-capitalist mindset.
On the impact on the underprivileged (that the "check your financial privilege" and "banking the unbanked" predatory inclusion crypto crowd purports to care so much for), the green-washing of Bitcoin, the crypto philanthropy "bad samaritans", Metaverse and Web3, check Peter Howson's Let Them Eat Crypto.
Ben McKenzie and Jacob Silverman's Easy Money is another non-technical examination of fraud in crypto, El Salvador, and the severe consequences for victims.
The problem with Lewis's book is that it was pretty clear it was an on-a-dime pivot from the original story he had planned to tell, about a wunderkind revolutionizing finance and trying to save the world at the same time.
And Lewis was into the original plot less than this one. Lewis is clearly on board with the progressive inclination to say that their cause is more important than operating within traditional bounds on behavior. Lewis was on board with SBF's irresponsible approach to risk management and regulatory oversight, because unlike Wall Streeters taking excessive risk for personal gain, SBF doing it for the sake of "improving humanity" was just breaking an egg to make an omelette.
Yup, I'm really surprised by people defending Lewis. Don't get me wrong, I own most of his books but his 60 minutes interview about SBF was a cringe fest.
Yeah, I think those people just didn’t watch Lewis’ interviews on SBF.
Seeing those tarnished my whole opinion on Lewis, and I cannot disassociate it from the book at this point. Not because I am “not able to separate the art from the artist”, but because Lews was talking about the exact subject matter of the book in those interviews. All while providing enough clarifying extra detail to fully affirm to me that he is either seriously delusional or is just on the grift of caring more about writing an exciting story (instead of actually having a more factual take on things).
I had already got burned by one of his books before[0], but i took it as a one-off. The SBF one, and especially those interviews, sold me on the idea that this is how he just is. Which is sad, because his writing and plots and stories are genuinely good, but the problem is that they pretend to be almost journalism. I really hope he considers going all in on grounded-in-the-real-world fiction genre officially.
[0] That was with one of his earlier books, Flash Boys. It was kind of embarrassing to reread it years later, once I actually gained some literacy in what the markets actually were and the high level mechanisms of how they operate. The framing of characters and events in the book was not only extremely biased, the whole premise and the problem statement were hanging on the absolute worst bad faith takes that were a almost a foot into “this is not a straight up lie only on the most technical level” territory.
You're like reading my mind. Flash Boys made me question everything he ever wrote. I happen to know a great deal about HFT, and Lewis was like a proto-GPT, espousing with great confidence things that were easily verifiably false. It made me wonder if all his books were just as ill-informed and my ignorance of the subject kept me from realizing it.
There's more of us it seems! I've been in HFT for the past 15 years and after reading Flash Boys I had to do a full 180 on Lewis. Every single book from him I now treat as mainly fiction sprinkled with some historical facts to maybe make it more relatable.
I don't even think it requires knowledge of HFT to see the flaw in the whole thing.
For example, the whole premise of the book was that banks would see 10,000 shares offered on 5 different exchanges. They'd go to buy 10,000, but only get filled on 2,000, and then cry foul. But people don't normally think like this. For example, if I wanted to sell my bike. I list it on Craigslist, Facebook and Next Door. If someone simultaneously contacted me through all three platforms, no one would expect that I was responsible for selling three bikes. Now, replace "bike" with "2,000 shares."
Even if FTX had never collapsed, I would still be shocked that Lewis didn't get proof of the management team's charitable donations. Through the whole book, Lewis keeps saying that all the profits were getting rolled into charity. Then in the trial, it came Singh testified that he hadn't actually been giving away money; it is unclear if other folks were doing the same thing.
No no, he is rich so of course he is just a kid, lost in the sauce, accidentally squandering a few billion. Now, 16 year old male from a low income household, those are men, and should know the consequence of their actions better. /s
This infantilizing is disgusting propaganda in and of itself.
It's not really propaganda, I think it popped up mostly because typical finance leaders are seen as being on the older side. As a Patrick Boyle video on the issue had put it, they had barely been in finance long enough to be trusted with the morning coffee run.
"Kid" is meant to be derogatory, highlighting the absurdity of traditional investors trusting openly irresponsible people with such little experience in such a heavily experience and regulation dependent field like finance. They behaved like spoiled children, with all the drugs and sex going around within the company, gaming while talking to investors etc. It doesn't make SBF look better.
Finance is about money, that's going to attract some people that are motivated purely by money. That's a bad thing and the culture in any institution should discourage this.
Yet at the same time finance is a big industry, there's plenty of honest, hardworking people that do their 9 to 5 (or more realistically 8 to 7) and go home to their kids. Finance has bad apples (just like tech) but I don't think we should write off the entire industry for that.
I'm learning his age in this thread and pretty surprised. I would have pegged him as being in his late twenties. I think stuff like his haircut, his general attitude, the league of legends thing, all contribute to making him seem younger than he his.
There's not many years difference between "late 20s" and 32. 3 years, if we set our benchmark at 29. As someone in their early 30s themself, do I consider myself much more mature or experienced than I was a few years ago? Not really; my life is in a better place, but that's because of factors that are kind of orthogonal to maturity.
I think your criticism is unfair. I didn't know how biological age, and I thought he was probably in his early-mid 20s. Not because he's rich and white, but because he acts, dresses, and cuts his hair like an emotionally immature boy genius right out of college.
A few of us wear suit jackets now, but I think that's just to stand out from the crowds of jeans and t-shirts that became my generation's accidental dress code.
(Though perhaps I'm just projecting; on the rare occasions I wear a suit jacket, that's what I'm thinking).
oh it was no accident. it took a lot of determined laziness and disregard for the casual Friday corporate culture BS by smarter than most people to change to rules.. band shirts, cargo shorts and skate shoes beats button downs, khakis, and leather loafers all day err day. got a not so casual work event to attend? bust out the nice grateful dead shirt, black zip up hoodie, and the jeans without the holes, and own it hard
1) blazers, specifically, are awesome, they’re wearable purses that also make you look sharper. They’re a superior version of the open button-up shirt I’d wear in high school because it was trendy back then and which also had (less well-realized) utility and useful-in-a-pinch value, and
2) loafers are the best shoe for everyday not-very-active stuff, and it’s not a close call. Slip on! It’s insane that they’re considered even a little dressy. A small miracle.
Except if you're an active person. Blazers don't give you full range of arm motion unless they are laughable baggy or made of some weird stretch material that looks cheap. Loafers are sub-optimal for running up stairs, catching the train/bus that's about to leave, or moving heavy things.
> The students were also shown photographs alongside descriptions of various crimes and asked to assess the age and innocence of white, black or Latino boys ages 10 to 17. The students overestimated the age of blacks by an average of 4.5 years and found them more culpable than whites or Latinos, particularly when the boys were matched with serious crimes, the study found
He's a full grown adult, who was trusted with billions of dollars, and worked with other full grown adults, who aided in his crimes.
Calling him a kid implies that he wasn't fully in control of his actions and shouldn't be held accountable to the same level as an adult would, and that's ridiculous.
Lewis also soft-sells the polyamorous relationships and complications that caused around SBF's relationship with Caroline Ellison. Caroline wants to go public, and why that would be a much bigger deal in the polyamorous world they were living in.
It's similar in many of Lewis's other analysis of SBF's relationships. Lewis avoids context that makes SBF look much worse.
I'm not familiar with the book but this doesn't sound like it pattern matches with any of the poly I've experienced. Going public is a big deal in poly in particular? Since when? What kind of self respecting tech bro group house doesn't have a graph of all the poly on their whiteboard?
If it wasn't a big deal, SBF would have been OK with Ellison going public with it. But he wasn't, and held out against it. Lewis spends not a single word digging into SBF's motivations around that.
Worse, he spends barely a chapter on how the polyamory which pervaded the highest levels of both Alameda and FTX might have clouded everyone's judgement and ability to say no. Mostly just limiting himself to: "It was a bunch of young adults all living together and who slept with whom changed rather fluidly. It wasn't a sex or orgy den, and the lurid tales about sex parties and all that aren't accurate."
Which I guess is probably true as far as it goes.
But not spending any time at all about how those relationships may have affected the corporate governance shows a strange lack of curiosity and unwillingness to think about conflicts of interest any relationship between business partners creates.
[I have no problem with polyamory itself--as long as everyone is consenting it's not really any of my business.]
I love salacious details like everyone else, but it sounds like you're looking for data where none exists. Why would those relationships affect the company, and who is going to consent to an interview about it? What exactly are you expecting Lewis to do?
The problem as I see it is not polyamory, it is casual sexual relationships between coworkers. It is kind of like why officers are not supposed to have relationships with their subordinates -- it subverts the authority that must exist in a structure where people are held accountable for decisions. By adding polyamory into the mixed it just made it worse since it increased the incidents exponentially.
Small beans compared to stealing billions of dollars. It's astonishing how the actual crime that SBF committed is almost invisible in much of this discussion.
YC is a success, PG/JL's relationship survived, and nobody got indicted. They're role models. If YC failed or PG got divorced, people might view it differently.
I guess what I'm saying is... I wouldn't read too much into SBF's sex life, and I wouldn't berate Lewis for not prying, especially with uncooperative subjects.
FTX had a 32--billion dollar valuation by that point, with over one-million users. Alameda was well over one billion and doing very sophisticated financial transactions.
That's not a tiny little startup hoping to make it big. Your investors and board want you to follow proper corporate governance, especially around conflicts of interest. Your users would like you to follow proper corporate governance rules so they don't lose their money. And do little things like following the express rules you told them you would follow (like FTX not loaning customer deposits to Alameda).
Playing fast and loose with the rules is what got him into trouble. The fact that Lewis doesn't pursue this angle just shows how big the pass Lewis gave him. It didn't have to be all about the lurid details, but the lack of best practices here was pretty bad.
By what point? The SBF/Ellison relationship predated FTX by years.
SBF lost+stole billions and you are angry with Lewis because he didn't pry into the guy's sex life? Which might not even be all that interesting, we're just assuming it. I like a good tabloid story too but come on.
I’m not angry about his sex life as such. Good grief. If it was exactly the same only with a bunch of people he didn’t employ and wasn’t committing fraud with I wouldn’t care at all.
Romantic relationships within a business, especially within the executive suite, cause conflicts of interest. Webs of romantic relationships create webs of conflicts of interest. If the executive suite commits a multi billion dollar fraud, not inquiring into what role the conflicts of interest played in that fraud ignores an important piece of the story.
The conflicts of interest almost certainly made the financial crimes much worse in the form of less oversight and less ability to look at what and was doing objectively.
Since the type of financial situation and financier Lewis writes about typically is amoral but also is sure that they are correct and proper, Lewis' continued access to future SBFs requires that he offload judgement to the reader.
It's almost like a realtime version of "Manias, Panics and Crashes: A History of Financial Crises" or "This Time Is Different: Eight Centuries of Financial Folly".
I think I read that Lewis was almost finished with the book, which was about to come out, and which was highly pro-SBF, when the FTX scandal Broke? So he then had to quickly revise and "save" the book by changing the tone in view of the FTX scandal? If so, it's probably an unusual book in view of the last hour rewrites.
That doesn't seem to be the case at all. A lot of the sympathetic content occurs _after_ the scandal and arrest, and Lewis has continued to take the same tone in interviews. Further, an inordinate amount of time is dedicated earlier in the book to a problem at Alameda that Lewis draws parallels to the scandal that took him down, clearly working toward his thesis. Lewis is one of the most-read living authors: they could have gotten a crack team of editors to help him revise the book in no time if he wanted to. It seems that his _actual_ take was that SBF was a dumbass rather than a criminal mastermind. It's not even an implausible view.
If you are talking about the time Alameda lost track of a bunch of money, and everyone freaks out except SBF, who turns out to be right, that story was hilarious foreshadowing.
Lewis also spends lots of time explaining how the whole thing that led to the collapse could have been avoided, they didn't need to be 'lent' money from clients coffers. They had money they could draw on and had in the past to finance market bets. SBF was just not very detail oriented, certain of his success and sure the rules didn't matter much.
He literally had meetings where he told people to buy other crypto companies with the criteria "Don't stop until you hit a billion dollars spent".
One of his supporters was certain he didn't do anything wrong, when the collapse happened, because he thought it would be insane to risk a golden goose like FTX, where you are the house in a giant gambling frenzy.
A special kind of non-chalant, non-selfaware hubris.
> SBF was just not very detail oriented ... and sure the rules didn't matter much.
anybody well versed with human personalities will know those 2 things overlap and might as well be the same thing (details and rules). Thats who SBF is by nature. And he created a company with similar culture. Thats's a recipe for disaster. That's where his lack of emotional intelligence shows up. not realizing the absolutely necessary need for the other opposite of his personality (people who need details and follow rules diligently). SBF was always going to end up where he ended unless he had found ways to make up for his lack of details and disdain for rules. Yes it helps him take risks others wouldn't take, make money quicker than others couuld, but it also came with the risks of losing money faster than others and ending up way afoul of the society. As someone with a similar personality style (fast rough estimate calculator with little regards for deails and rules), I have no sympathy for him. He lacks the most important dimension of intelligence - emotional intelligence. His arrogance in his own intelligence wouldn't even let him see that he did.
this exactly. the freakonomics podcast (iirc, maybe the economist's money talks?) did a long form interview with the "emergency CEO" that was parachuted in when ftz filed for bankruptcy.
my big takeaway from that is that the books, when they existed, were a complete shitshow. the money ended up all being there, but it was so scattered that it's taken all this time to find it. an investment here, a forgotten wallet there. they lost billions the way normal people lose dollar bills or car keys.
ofc that doesn't mean there wasn't fraud happening. the fact that they intentionally faked reserve balances and treated alameda like a piggy bank and did gymnastics to hide it can't be ignored. but even that still smacks of hubris to me more than a Bernie Madoff type scam.
it was like sbf didn't think it would be an issue because he genuinely believed that it would never be an issue. eg "people just want to believe there's a reserve, so let's show them one. we don't actually need it tho because we're actual geniuses." or maybe "no one will ever look because we're in the Bahamas and the Bahamas loves us, needs us." or it could be simply "money solves all problems and we have infinite money".
tldr: gambling addict gambled to the end and the house always wins.
>the fact that they intentionally faked reserve balances and treated alameda like a piggy bank and did gymnastics to hide it can't be ignored.
To be clear, they also gambled with normal FTX customer funds. People who were just buying cryptocurrency through ordinary means and not trying to do sophisticated trading. It was simple theft. You can say they thought they'd make the money back plus some, but I think a lot of Ponzi scheme heads think the exact same way.
>the money ended up all being there, but it was so scattered that it's taken all this time to find it.
This is explicitly not the case. The new management has not found hundreds of millions (billions) in cryptocurrency assets. Some other assets have surged in value and that may allow FTX to make some customers "whole" (meaning, they will not lose much money in an environment where otherwise maybe they would have strongly profited), but this isn't the same thing.
The new management found many billions of assets of various asset classes https://www.reuters.com/technology/bankrupt-crypto-exchange-... When FTX thought it was broke, there were really billions of dollars of stuff they were too much of a mess to come up with.
That isn't to say that 'all the money was there' or that the conduct wasn't deeply criminal and unethical, but a huge part of the shortfall was really just terrible books.
That billions of stuff were other coins that dropped in value which they were using to run their scheme and investments that are still illiquid, like their 500 million dollar investment in Anthropic. I can only imagine what that Anthropic investment is worth today.
This is even from the article you reference:
"FTX has benefited from a recent rise in crypto prices, Dietderich said. Its total recovery would be valued at $6.2 billion based on crypto prices from November 2022, when it filed for bankruptcy after traders pulled $6 billion from the platform in three days and rival exchange Binance abandoned a rescue deal."
When you’re talking about 8 billion dollars, it’s easy to lose sight of the fact that “a huge part of the shortfall was found” means that billions of dollars weren’t.
One concrete claim I found is that many BTC holders might get paid back in USD at the then-price of the coin, which is ~$16K. Bitcoin is currently at ~$65K, which indicates that they could have lost up to 75% of the underlying coins. Just to be clear: this is not the same as being made whole.
You have a source indicating the $473 to $600+ million that was supposedly moved to cold storage from client wallets was all recovered by the law, and/or the new stewards of FTX?
The famous John Ray (emergency CEO) quote from a court filing was
> Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here.
Someone associated with the case said that just because it was possible to recover most of the money he stole doesn't mean he didn't steal it. Crooks routinely go to jail even when the cops recover the money or goods.
This guy was lying like crazy in the media. He even said it was a ponzi scheme. Maybe he's a dumbass but he's also a criminal who was committing crimes while out there doing PR the whole time. Even during his trial he was lying so let's not act like he was in over his head and made some mistakes. He's never even owned up to it.
> He got caught up in it all and you bend, bend, bend until the next thing you know..
This denies him agency. Probably a better hypothesis is that he was a raging narcissist who thought he could swindle everyone with none the wiser, without realizing how transparent his fraud was.
It seems like for your theory to be better, it should fit the facts better (not saying it doesn't). Whether it seems agentic or not doesn't seem very relevant to whether it's what happened.
>And, btw, you might well have turned out the same way under similar circumstances, but for the grace of god.
that criteria is applicable to literally any criminal, ever. It's effectively useless as a statement about crime and punishment, although it serves as a useful reminder to those not condemned.
>2) SBF has severe moral deficiencies and belongs in prison for a long time, but not because he is "evil".
moral standpoint doesn't put you in shackles, poor judgement when comparing your morality with that of society is what does that.
finance is one of the most amoral industries to ever exist. They sit next to weapons and land-mine manufacturers, as far as i'm concerned.
Amorality is a benefit to the financier, the trick is finding someone that is amorale while also retaining a powerful enough understanding of the law and governing society that they can get away with enacting their deviousness without fear of prosecution.
SBFs morality doesn't matter -- what broke him was his poor judgement and overzealous confidence. We're not condemning him for his morality, that just speaks better to the court; he's in trouble because his plans backfired and money was lost for important people.
(p.s. we don't imprison people for being 'amorale', whatever that might mean from whoever is saying it.)
> the trick is finding someone that is amoral while also retaining a powerful enough understanding of the law and governing society that they can get away with enacting their deviousness without fear of prosecution.
A good biography does not cast too many moral aspersions. Its job is to paint a portrait of the person's life, including the details and quirks that shed insight into the subject's character. If you want affirmations of the awfulness of SBF and his crimes, there is no shortage of that by media and pundits.
> a) absolutely damning! SBF's lack of empathy, his notion that (given that everyone else is stupid)
Wow, I can’t fathom how one could believe everyone else is stupid. Yeah, SBF went to MIT, but really the best students in each descent university likely fall into the same percentile of academic talent. Or, as Bezos used to say, people can be smart in a thousand ways.
Im a big Michael Lewis fan and my only major gripe with that book is that he released it when the trial began, which meant he had to finish it well before. He left out the ending.
It’s an interesting story but it’s basically a cliffhanger with no sequel. He cut out right at the point where we learn the gritty details.
Not for nuttin' but that sounds like Aspergers. Mind you, I'm not a trained professional (to make that diagnosis). It's also no excuse.
That said, it makes a case for being aware of your blindspots (read: weaknesses). And if you think you have none... Well that's a blind spot. Fucking deal with it.
#2 is true of everyone. I'm not arguing against the kind of empathy you're describing, I just think we should extend it to all sorts of criminals. The murderer and rapist in the cell was screwed the moment they were born to dysfunctional, probably abusive parents. They have to fight hard to break the generational cycle.
All this means is that crime and violence are a systemic problem. Thinking about free will as the cause of crime isn't useful compared to thinking about how we might support and treat abused children and help them take a different path.
> btw, you might well have turned out the same way under similar circumstances
Which is where it’s bullshit arising out of the incentives of access journalism.
The Heinlen quote is more meaningful: you won’t be Sam. (If you’re in the set of people who could be Sam, the conversation is different.) But you might fall into his orbit.
So much of the apologia for SBF is disgusting. I don't need to have any humility, because I don't steal from people. I don't throw colleagues and lovers under the bus when I get caught stealing. I have humility and don't believe I'm the savior of crypto, the unbanked, etc etc. His entire worldview reeks of hubris and narcissism on a level I find disgusting and so common in "bro" culture. The idea that he can get out in 25 years makes me sad with our justice system.
Banality of evil. I'm sure SBF seems like a decent person who just wants to run a cool business and play with technology. He never thought he was a crook.
I don't think the banality of evil applies here. Banality of evil is when cogs in a bureaucratic machine don't think about how their actions hurt others, because they are just processing paperwork or following standard operating procedure. Regular people doing regular people things can do great evil.
In this case SBF was the architect and the driving force behind the fraud. He decided to comingle customers funds with business funds. He decided to trick banks into processing client money. He decided to split FTX into dozens of shell corporations to make effective oversight impossible. He decided to operate from Hong Kong and the Bahama's.
Banality of evil might apply to a junior engineer at FTX. It doesn't apply to SBF who masterminded the whole criminal enterprise.
(Eichmann was a Nazi through and through, fiercely antisemitic, knew exactly what was going on, and liked it. He didn't just "go along with it" in the banal sense, he chose evil knowingly.)
I never understood it that way. It was just that Eichmann and many other prominent monsters of the Nazi era were polite, cordial and unassuming people when you got them alone. That you could never tell what hideous souls they had because they didn't put it on display. They weren't cackling madmen or vicious savages in their personal lives.
I think that interpretation conflates civility politics and banality of evil.
One axis about decorum and appearance. Those who look and act like "good and decent upper middle class people" always get the benefit of the doubt where others do not, even when that appearance, like with Eichmann, completely falls apart on closer inspection.
The other axis distinguishes between people who have a highly ideological agenda and execute on it (evil) and those who are mostly unthinking cogs in a machine of destruction (banal evil).
Yes, but it was coined to promote specific view of Eichmann that he himself tried to cast himself in: that he didn't really like murdering Jews, he was just following orders.
I got a laugh from the author's assertion that the Lewis book examines "the psychology of an impulsive, chaotic, misanthropic genius". I mean, "genius" has long been a ludicrously overused word, but even so, this is a new low.
Isaac Newton is an example of an actual genius, someone whose work changed the world. Sam Bankman-Fried is an epically hubristic confidence man who stole/lost eight billion dollars and will as a consequence be spending a long time in jail.
Could we really all watch a friend spend hundreds of millions of dollars, getting into a questionable business, and not ask a single question about what’s going on?
Because I’m really, really confident I would never find myself in that situation.
It’s like comparing helping a serial killer bury 25 bodies to being a wingman to your buddy in a bar and backing him up when he claims to be 6’ when you know he’s really 5’10”.
Only one of these situations I can picture myself in.
"I hope they can get out from under this and try to find meaning, ideally from repairing the harm they've done."
How exactly would they do this? Have you read the victim impact statements?
Mistakes are errors. Like typing "Rick Heicklen" instead of "Ricki Heicklen".
But intentionally breaking the law in order to profit, is that a "mistake"?
A error in judgment perhaps.
SBF claimed he made "mistakes" but he never admitted guilt and he never apologised for breaking the law. He perjured himself while expecting the audience to believe he was "brilliant", competent and trustworthy to handle other peoples' money.
If what Heicklen calls "smart people" can work for a company with no organizational chart, no board of directors, no CFO, no need to use more than QuickBooks for handling millions of dollars in customer deposits, then perhaps these people are not "smart".
And it would be a "mistake" to believe otherwise. (Heicklen may still be disillusioned.)
We are living in a time when it is not safe to assume that because there is large amounts of money behind something that this something is in fact legitimate.
These people named in the comment all come from privileged backgrounds. Many of the victims of the FTX collapse, the ones who wrote to Judge Kaplan before the trial and the ones who submitted impact statements before sentencing, do not. Call me cynical but I do not forsee any of those named in Heicklen's blog post going to work to serve (cf. exploit) people from non-privileged backgrounds.
I highly doubt he will serve all 25. There is no parole in a fed case, but could get reduced time for good behavior. Unlikely he will be in prison stabbing people.
Imagine going into prison in the late 90's and coming out all the technology in the world today, none of which you've seen except maybe on TV.
The Dick Tracey movie came out in 1990 and now we've got smart watches which are literally a cell phone on your wrist.
Imagine going into jail when AIM/MSN/ICQ were the hotness and coming out to tiktok and snapchat.
That's someone who went into jail in the 90's. Imagine someone who went into jail in the early 80's or 70's. Coming out to the modern world would be like time traveling.
A lot of inmates coming out of multi-decade imprisonment are completely overwhelmed by how far society has advanced.
Pfft, in what ways has society advanced since then?
I'm being a bit facetious, but lets be real, most of the interactions people have with technological advancement create negative value for themselves and everyone around them.
The only thing that's arguably neutral is basic chat, and maybe HN which is marginally more sophisticated than it would have been then. Being able to take high quality photo and video at any time is quite a lot more commodified, but I feel like a former prisoner could handle that.
Maybe video calls would do it, that's another big one, but people born in the 30s can deal with it.
No dog in this race either way, but what is Michael Lewis meant to have done? Is it just that people feel hist treatment of SBF in Going Infinite was too lenient?
> An uncle once commented about a cousin of ours that he demonstrated how it's possible to screw things up so badly that you can't possibly recover.
beyond me why this irrelevant uncle comment is at the top but let me tell you this ... you can always recover. the only thing you don't recover from is death.
> I think that's true for Sam. I hope it's not true for the people in his orbit
People in his orbit knew very well what they were doing and looks that they will get mostly slapped on their wrists, since most fault was attributed to SBF only.
Sorry but he didn't "screw things up" he knew (objectively) early on that it was a cascade. And so he did the first mistake, load from a sister company, using self assets. When it wasn't called out, of course you think "this must be okay".
He's cheeky and a chancer. He is a victim of your uncles idiom. But that's not the crime, the crime is getting there.
What are you talking about? 25 years is absolutely nothing! You think he will not recover? I bet you he’ll be an influencer or something like that once he is out after 15 years (because USA is corrupt as hell).
> I hope it's not true for the people in his orbit; I hope they can get out from under this and try to find meaning, ideally from repairing the harm they've done.
Lol they're all very well off. Why tf are you worried about them, of all people in the world?
put another way, you're engaged in sexual, financial, and managerial relationships with an epic fraudster, and continue that pattern well after it's become clear that they're, at best, kind of dubious.
most people will never be anywhere near that, not on that scale and scope, and not with that kind of insight.
I think you mean to say, "An uncle once commented about a cousin of ours that he demonstrated how it's possible to screw things up so badly that you can't possibly get away with it."
I don't think Caroline is a bad person. She was brilliant smart and focused on academics etc. She got pulled into this mess during the crypto mania phase.
She willingly conjured up fake financial documents to suit Sam's needs. She had the kind of credentials that would have easily landed her a job at other financial institutions, she absolutely could have quit at any point.
It's funny. I lost tens of thousands of dollars thanks to this individual, yet his sentence brings me no joy or arouses any emotion at all. I'm utterly indifferent to his fate for some reason and I don't know why. Yet if he had been a mugger who stole a much smaller amount of money from me on the street, I think I would've been far more vengeful.
Should I feel vindictive? Or is it healthy to forget about it and move on? I'm not sure.
Purely speculation on my part, but I tend to feel similarly, and I think the reason is that the mugger includes a physical threat of violence.
Evolutionarily, the emergence of an economy with capital at modern-day scales are so new that we haven't had time to really adjust emotionally. It kind of reminds me of the various birds on previously untouched-by-humanity islands that had no fear of humans and would just sit there and allow a human to club them to death, until their species went extinct. They had no time evolutionarily to develop an innate (emotional) fear of humans.
Physical violence/robbery on the other hand is a long-standing human tradition, and something we are hardwired to react to emotionally (Amygdala vs. PFC, etc). We can of course override our Amygdalas with our PFCs to some extent (in the medium to long-term), but the "gut reaction" core is still there.
Another possible reason (for me at least) is that ethically I have a lot of inner turmoil over violent punishments (which physical incarceration absolutely is IMHO) for nonviolent crimes. Of course reality is much more grayscale than that given that crimes like SBFs could leave a family destitute and starving, which is violence-adjacent if not outrightly violent. A violent sentence for a violent crime intuitively feels a lot more "let the punishment fit the crime" than a violent sentence for a nonviolent crime.
Anyway, I don't have answers, but throwing some speculation onto the pile.
I had a business partner/family member steal money from me in our business. It very much hurt and was a painful experience hoping for vengence. Perhaps SBF being distant from you is what makes you indifferent.
Yes that's fair criticism regarding my feelings, but GP feels the same and they had stolen $10K. So the distance from it can't be all there is to it.
I'm also pretty distant from a mugging that might happen today, but I find myself getting angry about it, so that also seems to contradict the theory that it's about distance (though to be clear, I largely agree with you and I suspect distance is going to be a factor for most or maybe the vast majority of people).
After thinking about it, I think some humans do feel anger towards deadly diseases. If not anger, certainly fear. My aunt died of cancer, and most of our family was pretty mad at "cancer." I remember seeing a Twitter thing going around that was basically a lot of people tweeting things like "fuck cancer" and encouraging others to donate to the cause.
Maybe that's not really "anger," but it kind of feels and seems like it
I lost my dad to cancer. I was very much furious with cancer while being well aware of the irrationality of feeling that way. Still am, and it's been a few years. It's easy to be furious at cancer, and the pure random destructive wastefulness of it.
For cancer and forces of nature, there is anger, there is a sense of unfairness, but we ask "why" and the instinctive answer is there - force of nature.
To the robber metaphor, for example I've had cars try to run me off the road on my bicycle, so I approach the driver and it becomes immediately clear this is an insane person with major problems, and I think "oh, force of nature, this person is completely insane" - similar how "not guilty by way of insanity" is a real thing. Again we get an answer "why" - because this person is insane.
For me the deep insult that causes anger is if this is intentional, this is a person, they willfully did this of sound mind. Perhaps why a Madoff might make someone angry, but not SBF. In my view, SBF was a step or two removed from a big "too big too fail" 2008 bank that offered an interest rate to account holders by making investments with some risk. It seems to me SBF was operating along similar lines, 8% interest rate if I recall, but his intent wasn't to steal so much as illegally hide risk and hope for the best - and in his case, he was small enough to fail.
Predators also 'play the game of life' and humanity is downright vindictive about any who prey upon them. I personally suspect the real difference is how incredibly hard it is to target a disease. Hell, just identification of what a disease really is was spotty for millennia.
> we haven't had time to really adjust emotionally.
I think we adjusted, but we just apply broader context. No one would recommend going all-in on FTX with your life savings. Likely no one involved is really poor and this affected his life strongly. People lost money for their retirement retro vehicle, it's fairly easy to adjust to that.
This not saying it's ok, but its annoyance in effects mostly or should be(I think likely there are may be people, who put too much money, but then again internet financial advisory board all appears and says: HA! Told ya not to do it!).
I'm an indirect victim via BlockFi (headed by Zach Prince), which did business with FTX and lost my money as a result. I held 33 ETH in a BlockFi BIA account, and only recently got 4 ETH back. I don't know if I will ever recover the rest of my funds.
I don't know what your financial situation is but I'm not rich, and it is extremely painful to look at ETH trading at above $3000 and realizing my rainy day fund has been stolen by criminal nincompoops.
My personal values dictate that I be significantly more careful with money when it is someone else's money. Even if you gave me $20 to get you a Burrito, I'll get you the best deal, tip the minimum, and give you your exact change. I'd even give you a few cents more just in case because I don't want to be owing you anything.
So when a group of people behaves irresponsibly with people's money it boils my blood. He deserves every jail year he got, just on the hubris alone.
>So when a group of people behaves irresponsibly with people's money it boils my blood. He deserves every jail year he got, just on the hubris alone.
I don't want to rub on your wound but you need to take some responsibility as well. You knew crypto was risky. You knew many exchanges have scammed and went under, taking their customer's funds with them. It's arguable that every crypto exchange is shady and it's inevitable that every single one them will fall.
You should also blame the laws because exchanges and most crypto are clearly securities. But our law makers have been slow to respond and have probably been paid off by crypto money.
Not that I would lose sleep in anger over my missing ETH (I was not hit by this, I did not have anything touching FTX), but I think your take is a little unreasonable when FTX clearly acted in a way that is directly illegal to do as a financial institution. I don't keep my life savings in crypto either, too risky, but still.
Cryptocurrency is different because the primary value proposition is the "law of the jungle" market economics. The value of your tokens comes from the general swirl of criminal activity. You can't say you deserve the upside but not the downside risk.
Median household wealth is about $200k, and 90th percentile is about $1.6 million.
That means every tenth person in line at the DMV (a decent cross-section of society) is worth over a million dollars, and if you're in a major metropolitan area, much more.
> The median American in the 45–54 age bracket has merely seven thousand dollars more saved for retirement than you had thrown into crypto.
You should take those headlines with a grain of salt because they grossly misrepresent the studies they are reporting on. Quoting directly from your article:
"The median 401(k) balance is just $35,345."
Most people who have a 401(k) work at more than one company in their career and rarely roll funds over into the new company's 401(k). It's more common to leave it or roll it into an IRA.
All we know is the median 401(k) account balance at Vanguard is $35k. Vanguard doesn't know about these people's other retirement accounts at Fidelity or Schwab or wherever. If their customers hold IRAs at Vanguard, those aren't accounted for. In the case that a person has multiple 401(k) accounts with Vanguard, it wasn't even clear if the account balances are summed together and counted as one account.
tl;dr These reports are always about average and median retirement account balances, which is not at all the same as average and median retirement savings.
Are there actually a lot of retirees working as greeters? Maybe you only see the ones who didn't save enough. Or maybe they have enough money but like getting out of the house. Or they're doing it for the health benefits.
I assume retirees prefer greeter jobs because those probably don't require lifting anything heavy, as a stocker or cashier might need to do.
I worked at a grocery store for 5 years. A couple retirees worked there because they had to, but most of them just wanted something to do and health benefits.
As someone who lost a little bit through this whole debacle I think it is because we willingly gave our money to FTX. We wanted to believe in this story that was too good to be true. We got fooled and we are slightly ashamed.
When you get mugged you have no choice on what is happening. The actions are being forced physically on you. With FTX We chose to go that way so it somehow feels like we are as much to blame as SBF (and to be honest, we are).
I deposited some money with FTX and expected them not to steal it in the same way you expect a bank not to steal your deposits. I didn't gift to them or expect anything too good to be true. If a bank manager steals customer deposits to pay his gambling debts I put the blame 100% on the manager 0% on the customers.
Why on earth would you "expect them not to steal it in the same way you expect a bank not to steal your deposits" when a cryptocurrency exchange / hedge fund is not subject to even a fraction of the regulations banks are?
Especially when prior to FTX's collapse, numerous other crypto exchanges were turning out to be scams or going under, and even back then there was plenty of evidence that crypto was being used and manipulated by nation-states and criminal organizations? And it was practically a meme that crypto was full of shysters and scams?
Comparing putting your money into a too-good-to-be-true crypto hedge fund is nothing like "a bank manager stealing money to pay off his gambling debts." I won't name a culpability breakdown but there is no way you have 0% responsibility here.
> a cryptocurrency exchange / hedge fund is not subject to even a fraction of the regulations banks are?
US ones are. Shady ass casinos in the Bahamas like what SBF was running aren't though. Exchanges like Coinbase have been operating in the US under heavy US regulations for over a decade, and have never had anything close to a solvency issue. It's absolutely ridiculous that SBF was getting invited to basically write US policy despite FTX not even being a US based exchange.
> That’s strange. If I invest my money into any form of securities it’s pretty clear to me that the value of that capital might go to zero overnight.
What is strange about it? Losing money through investment risk is part of the deal when you invest, losing money because the fund manager decides to steal it is not part of the deal.
Crypto is more like handing money out to joe random on the street corner because he promises he’ll be there again next Friday with a 10% interest rate.
But there is still a difference between risk and fraud.
Risk would be if joe random tells you he'll "invest" your money in lottery tickets and then give you a 10% return if he wins or nothing if the "investment" goes bad.
Fraud is when he tells you that, but takes your money and buys himself some stuff.
Either way you lost all your money but in the second case you can sue the guy for fraud. In the first case he did as promised and lost the money but you only have yourself to blame for doing a dumb investment.
> As someone who lost a little bit through this whole debacle I think it is because we willingly gave our money to FTX.
That's not the whole picture though. If I invest in some risky stock (or even what I thought was not a risky one) and it tanks, sure I feel bad but it's part of the deal so it's ok.
But if I invest in something risky and I lose the money not through investment risk but simply because the fund manager outright stole my money, I'd be very angry.
This response is not helpful and I know of honest people who have been cheated. Basically, the response boils down to “if you got cheated, you are dishonest and deserved it”. Bullshit.
In this case, it’s somewhat more fair: everyone involved was trying to find much higher returns than they could get in regulated financial markets so while it’s sad that they were defrauded it’s also part of the risk they voluntarily took on by using cryptocurrency.
A lot of folks keep making that argument. What it sounds like you're saying is that Average Joe should really understand that crypto implicitly carries a risk of fraud and you are likely to lose your money. We should shout that from the rooftops. If you deposit BTC/whatever with someone, they are probably going to steal it. When they do, we will remind you that this was a foreseeable outcome.
I'm starting to think that these organizations need to be regulated as banks, stat.
Any institution where you invest or deposit money carries a risk of fraud.
Banks have steadily become less and less fraudulent over the last century.
Crypto exchanges have also steadily become less fraudulent, but still carry a much larger risk than the financial institutions to which people have become accustomed.
> What it sounds like you're saying is that Average Joe should really understand that crypto implicitly carries a risk of fraud and you are likely to lose your money
That is what a lot of people have been saying for a very long time now!
I don't mean this in a way to blame the victims of the crypto fraudsters, merely to explain the somewhat exasperated responses by people who feel like they've been trying to warn people who have been ignoring them.
> I'm starting to think that these organizations need to be regulated as banks, stat.
I mean, why do you think they don't want to be regulated and brag that they aren't? To make you more money?
Money _should be_ the least of the concerns of a mugger on the street. Subjecting yourself to lawlessness exposes you to real danger and kinda detracts from your ability to participate in commerce.
Granted, I haven’t seen any scientific evidence to suggest that a lack of money causes a lack of ability to reason (and thus a lack of responsibility for one’s own actions) but my own anecdotal experience does suggest it
Not really. The use of a gun/knife/lethal force implies a much different risk profile (you could easily die or be crippled for life). It's not about the money - it's about the violence.
That's a fair point. With FTX you might feel some sense of responsibility because you voluntarily gave up your money (whether it was fraud by deception or not). But a mugger is infringing on your freedom to walk around at night.
If someone put a big chunk of their savings into a speculative vehicle, they should be having a moment of contemplation about why they ignored basic investment advice. It’s not a happy moment for anyone but at some point you do have to take responsibility for your decisions.
If the loss was due to the speculative asset going the unexpected direction sure. But here was fraud.
Would you say the same if a pension fund ran with your retirement, since it is invested in some stock index, most likely in previous metals, and probably a slice in crypto?
Yes, it’s fraud but it was also in a system which intentionally was set up outside of the normal protections against fraud. The relationship between Alameda and FTX wouldn’t have been allowed for a traditional finance company, for example. He’s a crook and I’m not defending him in any way but at some level this is like buying a Rolex off of a guy in Times Square and then being surprised that it’s not real.
Enron is an interesting example: first, you had to go back a quarter of a century for the example whereas that kind of thing happens routinely in the cryptocurrency space, and the response wasn’t just to shrug but to pass stricter regulations (Sarbanes-Oxley) to prevent it from happening again.
Remember, the claim isn’t that the traditional finance world is without problems but rather that people who deliberately seek out high-risk investments do share some responsibility when those fail. Someone who trusted Enron’s public audit reports was more comprehensively failed than someone who sought out a company specifically incorporated in the Bahamas to avoid compliance with US regulations!
What does it being a speculative vehicle have to do with FTX stealing the money? These people did not lose money because their speculative investment lost value. On the contrary, it has gone up considerably in the meantime but FTX pocketed all of the gains.
Think about what happened as soon as a grownup entered the room and saw their records? Real financial companies have tons of regulatory and insurance requirements for things like audits, reserves, etc. to prevent things like that from happening but the entire point of his field was “that stuff’s just slowing me down and we don’t need it!” because everyone was focused on getting rich and overrode their judgment.
It’s the next level of risk up from people who buy stocks because the price is going up without checking the fundamentals. If all you do is hang around with other people hyping the same thing, it’s really easy to focus on the “number goes up” part and not want to be the person spoiling the party by asking about value.
Sure because it’s impossible to have another Madoff in the traditional Wall Street system? No. And some people have found themselves in clawback if they made their money back. Imaging someone investing in Madoff for 25 years and finding out that the investment is a scam, losing their capital but also the state is now after them for hundreds of thousands of dollars.
The obvious risk was that FTX would just take their money? I would have thought the obvious risks were crypto tokens losing value. They didn't get burned by that, except in the sense that their tokens were no longer theirs while the value went way up.
I agree it wasn't obvious FTX would just take all the money, but it was obvious that you could lose all your money.
"The very first Bitcoin exchange, Mt. Gox, collapsed in 2014". Different reason, similar outcome.
And Bitcoin was down 2/3 from peak when FTX collapsed. Close to losing it all. And enough doomsayers to know any gambler was running that risk.
And countless prior examples in lots of markets showing that speculation in risky assets is very risky!
You often don't know the specifics of why something is risky, so even if a particular outcome was unlikely, that doesn't mean an investment was "savings".
Uh, yes. They should have. One of the whole shticks of this whole thing is that the money transfers anonymously. Once you are gifting someone money with a credit card for some numbers in a database under their control? In the ** bahamas?
Of course there is - being mugged(or having stuff stolen from you) can ruin your life, not even in any physical sense but psychologically it can be devastating. I've had a bike stolen from my house, I didn't even witness it being stolen or anything, just one morning I woke up and the house was broken into and my bike gone - relatively minor financial inconvenience in the grand scheme of things, but for the next 2 years I hated living in that place, I was uncomfortable in my own house and scared of walking around, I honestly felt violated in the sanctum of my own home and couldn't get relaxed around there again. Eventually we moved and in the large portion it was exactly because of that.
So please tell me, even assuming if that person stole my bike to buy bread - how can it possibly have been moral given the impact it had on the life of another person?
It's a little odd that you've changed the topic from stealing food to survive, to stealing someone's bicycle (regardless of your halfhearted comment about the possibility that they stole your bike so they can go buy bread... which... what?).
If someone needs to steal something (anything) in order to survive (an actually survival need), hopefully they will be able to do so in a way that doesn't cause a bystander the kind of difficulty you're talking about. Like they could steal the bicycle from a bike shop instead of a person's home.
But ultimately, if it's actually a survival need, I hope if push came to shove, I wouldn't put my psychological well-being (something that, when hurt, can be healed) above someone else's life (something that, when lost, cannot be returned).
>>It's a little odd that you've changed the topic from stealing food to survive,
Why is it odd? OP said stealing to survive is never immoral, to which I said that of course it is, because theft has a profound impact on the victim, no matter the reason for stealing. People who are victims of theft rarely know why they were stolen from, so they cannot adjust their emotional response as if every thief is stealing to feed their families - and I think acting as if that's a reasonable assumption in any way is well, unreasonable. Sorry if that wasn't clear.
>>But ultimately, if it's actually a survival need, I hope if push came to shove, I wouldn't put my psychological well-being
Sure, and neither would I, but I don't accept that stealing is the moral choice - the person could have literally knocked on my door and asked for food and I would have given them food, and I'm sure majority of people would as well. Again there is a bunch of assumptions there, but I find the whole conversation a bit disingenuous - there is of course actual undeniable theft where the alternative is death in various places around the world, but I refuse to accept that this is the kind of theft most people are talking about here - no one in any modern country is stealing to survive, literally every developed country has programs that will just give you food if you ask - dying from starvation should not be happening anywhere with even a semi functional social system.
You think the sanctity of your home and peace of mind is worth another man dying, rather than eating, when your bike could have saved him?
... You and I both know that your bike wasn't robbed to prevent starvation, making your example completely beside the point. If it had been robbed to prevent the starvation of a human, you ought to feel happy rather than violated - your small sacrifice saved a whole life!
America has more than enough wealth to feed everyone on the planet, but 10 million kids are hungry in the US right now. Someone is stealing that wealth, and it isn't muggers. Try to gain some perspective, despite the daily news telling you to be scared of the poor.
Your approach is gross. Blessing theft the way you do creates two victims, the one from whom it is stolen and one who is not steered towards a better way to live.
The US even still has tremendous opportunity to build a life and earn money. Stealing undermines one's ability and focus to build such a life and undermines the surrounding community as well.
You clearly think you're a great guy/gal/whatever for thinking that someone should be thrilled to be stolen from and you're oblivious to the nothing-but-more-misery this approach practically generates.
I'm kinda on your side here, but you did say "you ought to feel happy" after being robbed by someone who needs it more than you do, which is a bit ridiculous.
The hypothetical situation wasn't "someone who needs it more", it was someone who is literally starving to death.
A contrived situation, no doubt (though not mine). But despite HNers claims to the contrary, some people actually do starve to death because they can't earn for a variety of reasons. And, rather than take care of those people, the US vilifies them.
This leads to a society where tech-bubbled freaks get slightly rabid at the notion that it's morally ok to steal to survive - even going so far as to flag such comments.
I laugh, but the tech community keeps putting up these red flags the last few decades, and it's actually worrying. The disconnect from reality is unfathomable. There's people here claiming that stealing bread to save your life is just as bad as stealing 8 billion dollars - that's unhinged on a level that's hard to imagine.
>>You think the sanctity of your home and peace of mind is worth another man dying, rather than eating, when your bike could have saved him?
Yes, because they could have just asked and I would have given them food. Literally anyone would I'm sure.
The thief in that case choose the path that inflicts psychological damage, because they were too cowardly to just ask for food. In that case they have literally zero of my sympathy. Thieves are the worst people in the society just after murderers and rapists.
Saving that human life is the job of the institutions that we all sacrifice a huge portion of our resources and freedoms to.
It's not the job of an individual to keep their property available in case a desperate person needs to steal it in order to survive.
The implication of what you're saying is that any crime is morally justified as long as the perpetrator is doing it in order to survive, and the victim isn't killed. Which is insane.
> The implication of what you're saying is that any crime is morally justified as long as the perpetrator is doing it in order to survive, and the victim isn't killed. Which is insane.
That doesn't seem insane to me. I think you've phrased it in a somewhat unfair way. But I don't think doing what you need to do to survive is really a moral issue. Certainly it's best to secure your survival without hurting anyone else. But if the choice is between death and making someone else uncomfortable, I don't think I'd blame someone for choosing life if they have to make someone else uncomfortable or inconvenience them.
Certainly the scales have more trouble balancing when it moves from discomfort/inconvenience toward physical harm, especially permanent physical harm. But also consider that in many cases people do have a choice how they react: a shopkeeper, when confronted with someone stealing bread, can get physically involved and risk their safety for the sake of that bread, or they can let it go and consider it the cost of doing business.
This is why most people recommend that if you get mugged, you don't try to play the hero: you just hand over what the mugger wants, and let them go. Your wallet or phone or laptop isn't worth your life. This doesn't make it ok for the mugger to do what they did, but ultimately what matters is the outcome: do you want to get out of it relatively unscathed, or do you want to risk injury or death? Once you're in that situation, you do get to choose how you react.
Anyhow, that doesn't make it "right" or moral or whatever if the thief ends up hurting the shopkeeper during the theft, but it's hard for me to get too up in arms if the thief has no alternative than stealing food. It's understandable, even if it's a bad outcome.
The consequences of robbing someone under threat of violence go far, far beyond them losing their property, even if they aren't physically harmed at all. Calling this making someone "uncomfortable" or "inconveniencing them" is disingenuous bordering on dishonest. In many cases, the victims of robberies are simply unable to continue leading normal lives, even though their limbs are still attached to their body as before.
I can't believe I'm arguing that it's immoral to steal on HN, but here we are...
Yes, you might decide that breaking your moral code to feed yourself or your family is an acceptable tradeoff, but it's a tradeoff nonetheless. It's a conscious choice. A lot of people in history made a decision to go hungry instead.
Children might see the world in Marxist generics where some ambiguous, but for some reason always "wealthy" people stole all the fruit trees and poisoned the water. Adults usually deal with specifics. Who are all these mysterious people are? Do you think the food just fell from the sky before the industrial age? What do you think happened to the people who stole before the industrial age, hungry or not?
If you don't think income and wealth inequality is real, I'm not sure what anyone here is going to do to help you understand this better.
The fact remains that we could feed everyone on the planet... if we chose to. Capitalism just doesn't incentivize us to do so.
You talk about how stealing bread to survive would be "breaking your moral code", but I think it's absurd that we've gotten to this point. How is a society moral if it allows people to starve? I won't say two wrongs make a right, but when society actively allows people to die of hunger, I think those tut-tutting about moral codes need some side-eyes and eye-rolls directed their way.
And we are all culpable to a certain extent, as members of that society. Perhaps those of us who donate our money or time to help those in need are a bit less culpable (along with people who are just scraping by and don't have the money or time to spare). But if we've benefited from that system (as I have), we share some of the blame (as I do). And go further and consider people who actively vote for politicians and policies that remove social safety nets and make it harder for people on the margins to feed themselves. All the "temporarily embarrassed millionaires" the US who seem to think that no one deserves any help for anything. It's disgusting.
I said "stealing to eat". Because the claim was "stealing is never moral and is just as bad no matter the amount".
You heard "point a weapon at a stranger and demand the contents of his pockets".
And, since this seems to be really confusing to a lot of people here for some reason, stealing tens/hundreds of millions of dollars from people is in fact unambiguously worse than mugging someone for their wallet. It's far more violent, and causes far more suffering.
The topic of the thread changed at some point; you seem to still be on the original topic, when the rest of us are talking about stealing food to survive.
You realize Le Miz is fictional, right? No one needs to steal to eat, some people choose to steal rather than earn. Stealing is immoral regardless of the circumstance, don’t take your moral philosophy from Disney movies and broadway.
> Stealing is immoral regardless of the circumstance
That's your opinion and your conception of morality. My moral code isn't so rigid that I can't imagine a world of nuance, a world where things aren't black and white, where things don't fit neatly into little boxes.
There are plenty of people in the world who end up in bad circumstances due to things outside their control. And yes, some of them need to steal to eat. Even if it's just for a little while, so they can work on improving their circumstances. Something that's incredibly hard to do when you're malnourished.
This might be the most out of touch comment I've ever read, to the point where it genuinely looks like sarcasm mocking someone who would think like that. Apologies if so.
There is no amount of “being in touch” that could justify literally criminal behavior. The consequences of propagating lawlessness are far greater than starving to death. Unless, of course, you have a self-centered point of view and/or no principles.
If you have a problem with the way the world works, there is always a non-violent course of action to take to change it. There is no other option. If you think there is another option all you have to do is say so, I’m sure the keepers of law and order and the voting masses on whose behalf they act are equally willing to deal with whatever you choose.
I think it's criminal that society allows people to fall into circumstances where they become homeless and/or hungry, to the point where they're desperate enough to need to steal to eat.
"Criminal behavior" is a construct of human society. Morality is, too, for that matter. I have no problem with someone stealing food to survive. Hopefully they are able to do so without harming anyone else. If someone does get harmed, I won't hold the thief blameless, but I also can't find it in my heart to condemn them, either.
> The consequences of propagating lawlessness are far greater than starving to death.
That's a false dichotomy.
> Unless, of course, you have a self-centered point of view and/or no principles.
Do you think no one irl ever stole bread to feed their family only to be extremely punished? ...
> No one needs to steal to eat, some people choose to steal rather than earn.
You're wrong. You're a hundred kinds of wrong. That mindset is a deep, deep sickness.
> Stealing is immoral regardless of the circumstance
If the choice is between stealing and starvation, the moral thing to do is steal. Which is, in fact, the scenario we are talking about.
Not everyone can earn - and in a society where wages have become untethered from productivity for over 50 fucking years, where the social contract is broken and ground into dust, where healthcare and housing are seen as privileges rather than rights, you might start to expect getting pushback on such untethered and inhuman views.
> don’t take your moral philosophy from Disney movies and broadway.
Better than taking it from literal comicbook villains.
The “No one needs to steal to eat” mindset is a “deep, deep sickness”? My brother in Christ what kind of backwards world do you live in? Where on this planet is it acceptable to steal, especially in a mugging situation that implies physical confrontation and the threat of violence? I can’t tell if you’re trolling, you’re actually asserting that you live in a fairytale defending something like Robin Hood.
Wages have never been tethered to productivity, arbitrage has existed since before there was even a currency. Healthcare and housing has always been and always will be a privilege, your human rights only extend so far as they do not infringe upon someone else’s human rights. Doctors and construction workers cannot be compelled against their will to do work, neither can the collective taxpayer.
I think the problem here is they are imagining extreme situations where you genuinely don't have any opportunity to survive without it. Such situations could exist, like in Mao's Red August and a score of other such historical tragedies. But what the commenter is not understanding is that "Morals" matter jack shit in such a situation. "Morals" are a product of civilization, if you are not being treated as human by your society you have no obligation to act as human either.
> But what the commenter is not understanding is that "Morals" matter jack shit in such a situation. "Morals" are a product of civilization, if you are not being treated as human by your society you have no obligation to act as human either.
My gut feeling here is that this isn't even a moral issue at all, but I've been having trouble articulating that point. You absolutely hit the nail on the head with this.
> The “No one needs to steal to eat” mindset is a “deep, deep sickness”? My brother in Christ what kind of backwards world do you live in?
This one! Our world is pretty backwards! If you can't see that, you must live a privileged, sheltered life.
Do you think a world where medical bills can bankrupt people is not a backwards world? Do you think a world with homeless people is not a backwards world? Do you think a world where we incarcerate people by the millions for smoking a plant is not a backwards world? And these are just a small sampling of things that happen in the US.
If you truly don't believe we live in a backwards world, I don't know what to say. You're just so completely out of touch with the reality we live in that there's no way to have a productive discussion.
If we're going to talk morality, a lot of land ownership and resource extraction stands on very shaky ground, given that a lot of land was at some point in recorded (or recent) history stolen from someone else. And stealing is always immoral, so...
Perhaps previous exit scams in the crypto space dulled your senses?
If anything, I feel like you should share your story to protect others, especially during times when crypto is peaking (like now) and others are tempted to jump in: use exchanges to buy/sell and get out, store your keys on a cold storage device, and transfer out fiat ASAP.
Surely the better takeaway is to just not bet on crypto in general? It's supposed to act like a currency, not a stock. So long as people keep feeding into these pump-and-dump schemes they'll keep happening.
Money doesn't come from nowhere. For every dollar you make on crypto, somone loses a dollar. All these BS coins do is shuffle wealth from the unlucky gamblers to the lucky ones. Go spend your money at a casino instead.
This is oversimplifying, but stocks are essentially purchasing a stake in ownership of the company. The company uses that money to advance its mission - ideally generating more profits which are shared with the stockholders (dividends). It's that stake in ownership and expected dividends that give stocks inherent value.
There is no company behind crypto currencies that holders get ownership of. There is no product or service to drive profits. There are no dividends, voting power, or anything that gives inherent value to the coins. It's all pure speculation. Just money getting shifted around among the holders - with exchanges taking a cut off the top of each transaction.
I'm sorry, but what am going to do with my Class C shares of Google which have no voting rights? They also haven't paid dividends. My buying of them didn't give Google any money, either. My infinitesimal ownership in Google doesn't get anything other than it's a number in a database somewhere that hopefully goes up. There's underlying assets there, sure, but as we've seen with GME, TSLA, and now NVDA, it's all just vibes.
In this case though, FTX had their own token FTT that gave people that owned it voting rights in FTX and "staking rewards" aka dividends. It's not worth anything today due to the fraud that SBF perpetrated, but that sure smells a awful lot like a stock to me.
Long-term investors are buying more stocks at a lower price, with the idea that at some point the company may eventually pay dividends that justify the price of the stock, at which point they get more share of the dividend profits. Folks who purchase these stocks after this point would base the value on the value of the dividends.
Day traders are gamblers.
Cryptocurrencies will _never_ pay dividends, because they are based purely on speculation. These things are absolutely not the same. Cryptocurrencies only provide gambling.
That's because they're running the validators, and they're sharing some of the gas fees with you. If you're getting a high APR it's because the protocol is extremely expensive for users. Imagine if your stock trades, purchases, or bank transfers cost 5% (which is a low estimate, because if you're getting 5.1%, then Coinbase is also taking a cut).
You're locking up your crypto for this for some period of time, which means you lose liquidity to get gains. During that period of time the coin can crash and you're out of that money.
For stocks, you don't need to lose liquidity to get dividends. For companies generating profit, they don't necessarily need to be parasitic to generate those profits. It's possible to generate profits while also providing value for users.
Take for instance Venmo and the ability to get funds from your wallet into your bank instantly. Venmo is taking risk by doing so, the banks are taking risk to do so. They charge you a fee for this risk. You want your money faster, and they want their risk covered. They're going to eat some amount of fraud by providing this service, but the cost of providing it should cover the fraud cost and offer a small profit. It's mutually beneficial and optional (regular bank transfers are slower, but free).
Lots of SaaS products are similar. They offer a product businesses need, at a lower cost than the businesses would have to pay to build/run it themselves.
Those are profitable things that are just services, like crypto, but businesses also build things that have physical value, like houses, undersea communication cables, etc.
If people stop trading crypto, all value is immediately gone.
Stocks are not completely nondeterministic games of chance, which is why most people who hold properly diversified stock portfolios have seen long-term growth instead of loss. That's probably why people don't call it gambling.
> Stocks are not completely nondeterministic games of chance
That's a bit of a straw man, as no one claimed they are. "Gambling" is often not a nondeterministic game of chance, either. For example, when I go to a casino and play poker, I'm still gambling, even though there's plenty of determinism and strategy to go along with the elements of chance.
>>My buying of them didn't give Google any money, either.
You buying the stock raised the price of the stock. Google uses the stock as compensation. The higher the price, the easier they can hire, and the less cash they need to offer to employees while still being attractive.
...is explaining it here too much of an effort, or what? Like I don't mean to be rude, but that really doesn't strike me as an unreasonable question to ask.
I don't know what you do and don't know, and what misunderstandings you're operating under, and threaded forums really aren't set up for the kind of back and forth it would take to do a proper calibration so as to give an appropriate answer that is at the right level of explain-y, and not mansplain-y/condescending. But what the hell, I'm waiting on a build (rust).
Companies IPO and sell shares. The company gets paid by people who want to own shares. The company IPOs and sells 1000 shares at $50 each, gaining them $50k which they can then use to buy a new whatever. Then, in a market like NYSE, other people can buy and sell stock. If I think the stock is undervalued I offer to buy 1 from someone at $55. that person gives me 1 stock, I give them $55, netting them $5. The company is not involved in this transaction and does not get anything from that specific transaction.
Now that the price is at $55, the company could decide to sell additional stock, now at $55 instead of $50, but that's a separate event from the transaction that happened previously. So the company does benefit from the stock price being high, but not directly off each transaction.
I've omitted all the details, but I think that's enough to get the gist of it.
When you go to your brokerage account and buy a share of Google, you aren't buying it from Google, you're buying it from some other random shareholder out there who wants to sell. Google does not see a cent of that money.
In general, the only times a company gets money when you buy shares are if you participate in an IPO, or if an already-public company decides to offer more shares for sale in order to raise some money, and you buy some of those shares. (There are exceptions, but retail investors like you and me usually don't get invited to participate in those deals, though.) The vast majority of shares that trade hands on the markets every day are not owned by the company whose name is next to the ticker symbol.
Read up on Capital Markets (Stocks / Bonds). Ways for companies to raise money.
HN/VC is NOT the traditional way for companies to raise money.
Buying outside a IPO is called the secondary market. If nobody could buy a share in the secondary market, the stock is almost worthless. Just like your private company with one round of funding and shares. If you can't sell them, they aren't worth much.
> Why would someone sell the share for less than this "inherent" value then?
Because the inherent value includes things we know about such as the assets the company has, but it also includes the speculative future earnings which we can't be sure about.
The market cap of its stock might but if you looked at the financial press during that episode it was full of people pointing out that there was no change in the fundamental value of the company. That’s because real businesses have things like sales volume, profit margins, property rights, etc. which aren’t entirely arbitrary and dampen the swings considerably. That’s not perfect or immune to abuse as Boeing shareholders are no doubt aware but it’s very different from something which has no grounding beyond momentary social consensus.
While I agree that there is a lot of hot air in crypto, what gives value to something like ethereum is the fact that you need it to use the network. Given people think it's useful to use that network it will give value to ether.
That does add some value but it’s fairly weak - people can always choose to switch to something cheaper, capping the maximum - and it adds its own risks: price spikes might leave you unable to perform transactions within your budget.
Yes, people can always switch. Unlike a sovereign currency nobody has a legal obligation to use any cryptocurrency, which means everyone is going to assess whether they’d be getting better value using something else.
Yes, and in doing so you've managed to blissfully ignore all the speculation and outright gambling that goes on in the stock market.
I'm not a crypto defender; I think it's mostly useless and a waste of people's time and money. But let's not paint a big rosy picture of the rest of our financial system. That's just not where the truth lies.
I did no such thing. I only answered the question I was asked. For some reason a bunch of people interpreted that as a defense of short-term stock trading.
Publicly traded companies make money by creating value and selling products or services. At least, the good companies that actually sell something (you'll find a bunch of them don't do crap or are just outright scams).
Take Apple or Coca Cola for example: They have well established lines of products and lines of business. You know people will keep buying iPhones and MacBooks and AirPods and whatever else Apple makes. You know people will keep buying Coca Cola drinks forever and ever.
The popular blockchains do not create any intrinsic value (Looking at Bitcoin and Ethereum). They are heavy and cumbersome and can't handle planetary scale. Some blockchain solutions promise secure, fee-less transfers (for example IOTA and NANO). In my opinion, those blockchains at least partially implement the true promise of Crypto that, if successful, would be able to replace the existing financial system which is extremely wasteful.
Just think about how much money it costs to implement FIAT: You have to print it, which is very expensive (both notes and coins). You then have to move it around using heavy armored vehicles. You have to secure it in extremely expensive vaults. You then need to keep securing it across the entire vertical: Every business that takes cash has to deal with theft, securing the cash, fake notes, etc. Even credit cards are very expensive to maintain. Cards have to be printed & mailed out all the time. It's all plastic, and it all ends up in landfills. The inks are toxic, as are the metals in the chips. The equipment required to process cards is expensive, breaks and needs to be replaced, is annoying, slow, ridden with fraud and theft and chargebacks and a host of other issues.
I implemented EMV and 3D-Secure for card processing, a few years ago. I also implemented cash processing equipment. It ALL sucks. You have no idea how Crypto is a breath of fresh air compared to those crappy standards and mechanisms that take an insane amount of time and money and bureaucracy to implement and maintain.
A really good blockchain that does secure, fee-less transactions in less than a second and can handle planetary scale, now that is the holy grail! You don't need equipment, you already have a phone. The merchants get their money instantly, and they are done, that's it. They have their money. Done. They need to pay their vendors? They pay them, done! They could even instantly pay their vendors at the moment of sale. Can you imagine how revolutionary that is? how this completely changes the game for commerce?
The entire crypto world has been held back by greedy assholes, tens of thousands of scammers (how many ICOs and rug pulls have screwed countless users?!), governments, government bodies and banks, and unregulated companies that behave irresponsibly with customer funds (for example FTX and BlockFi). Leadership that lacks vision and initiative (Any 1st world country that accepts crypto and leads with it, would make its citizens rich, by definition, on a planetary scale).
> Publicly traded companies make money by creating value and selling products or services.
But their stock price is (mostly) independent of that. It is indeed true that at least with short-term trading, your gain is someone's loss, and vice versa. There is a difference between cryptocurrency and companies, but there is little difference between trading in cryptocurrency, and trading in traditional company stocks.
Absolutely totally utterly fee-less is unrealistic. Operating the network costs something. Visa/MC get to take their cut, why should a replacement system be run as a charity? that's not sustainable.
You're basically just describing fee-less digital currency. The problem is that achieving the fee-less part by using a blockchain makes some extremely undesirable tradeoffs. To name a few:
-Money laundering becomes impossible to prevent when no entity has control over identity verification of the users.
-All transactions are public, so normal users who won't be trying to lie about their identity lose all financial privacy.
-Undoing transactions due to fraud or simple error becomes extremely cumbersome and ultimately requires re-centralization of authority that crypto supposedly was created to avoid.
Digital fiat transactions operating in the current financial system are the best of all worlds, and unsurprisingly they are already extremely common.
Crypto is one of the only markets where someone with virtually zero investment can become very rich. It's not easy, but smart traders can make a lot of money. You are not doing that at the casino.
Crypto is supposed to act like a stock. Very few people actually want decentralized digital dollars. Compared to the number of people who want decentralized digital get rich quick schemes.
If it isn't obvious already that cryptocurrency is one giant grift, then I don't know how many more stories are going to help. The SEC or Congress or someone with power needs to just make it illegal, or else this kind of thing will keep happening. It happened before we got our shit together in the early 20th century, but we collectively realized markets were actively doing shady things, and then we legislated to fix things. Will we do it again?
You should feel how you want to feel. However, I think certain politicians and most mass media outlets push you to have more compassion for white collar criminals and to think of others as less than human. When you hear them talk/print "tough on crime", they never seem to include white collar criminals in that. When the current admin expanded the IRS enforcement, they pushed back.
It's no surprise. After all, these politicians and the owners of such outlets are likely to be a little guilty of ripping people off a few thousand here and there as well...
Mugging is much more violent and personal. SBF didn't see you and think "that's the person I'm going to get" he essentially created a fraud machine that you and hundreds of others got caught up in. Very impersonal.
It's a bit of a different scale/topic, but I found the discourse here quite insightful. It talks about the method "Restorative Justice" by going through a concrete example where this was lacking. Really heartwarming to listen to.
"Restorative Justice" is more bullying from authorities and taking time from the victim.
From your link: "Victims may help decide on the punishment for the person who harm them. They often get answers and an apology. Offenders might receive reduced sentences." -- how about increased sentences because of how the victim feels? No, it's all about going easier on offenders. All the authorities involved are pushing victims to "go easy" on offenders aka bullying, victimizing them once again.
Someone, not a thief, hopefully filled the seat in the master's program Donovan was eligible for.
Restorative Justice means different things in different [US] states and counties, for different types of crime, it depends on whether the state's attitude to felony convictions and expungement is medieval or not (like in FL, KY), and the wide discretion prosecutors have to charge/plead something as a felony, misdemeanor or not to charge at all, plus the discretion police have on what to arrest for. And especially, it depends on the DA, who is an elected official:
* That HiddenBrain story was about a VA conviction for felony grand larceny for stealing a bike whose value exceeded the grand larceny threshold ($1000). In that case the victim (an English guy who supported the UK equivalent) emphatically did consent to restorative justice approach and expected a non-custodial conviction could be quickly expunged, but the VA system doesn't work that way. So all his intervention effectively did was spare jail time to the thief, but not all the other consequences.
* Compare to the 2021 Oakland, CA gang-related freeway shooting death of 23mo toddler Jasper Wu [0] in a rolling gunbattle between two rival gangs (one of them using an AR-15) on highway I-880 at 2:07pm in the afternoon, Wu was hit in the head by a stray 7.62mm rifle bullet in the rear of his mother's car. Three accused were charged with murder (one since had charges dropped), but then 4/2023 [1], new incoming DA Pamela Price, in the name of restorative justice, wrote an internal memo of her intention to "bring balance back to sentencing and reduce recidivism"- by not allowing prosecutors to "file or require defendants plead to sentencing enhancements." Not adding the special circumstances charge would drastically reduce any likely sentences, and exclude a life sentence (Price points out that she did add the gang-enhancer, but not the special circumstances charge) [3]. The victim's family were not consulted before Price's decision, and objected. [2]
Price sent a series of emails to members of the Asian American community and county supervisors. In one, she claims "certain vocal members of the local Chinese community and media including reporter Dion Lim... misled the public."
In another email one week later, Price addresses "Chinese communities" calling many "misinformed" and blamed [them] for "spreading misinformation."
The matter is pretty politically divisive in the East Bay [3]. DA Price refuses to budge on this and there is currently in 2024 a major recall effort against her [4].
These two cases are pretty much the opposite end of the spectrum to each other. They also show how politicized the actions of an elected DA can be, depending on the mood of the electorate that put them in office. They also show that DAs can completely disregard the victim's/family's wishes.
Maybe on some level you felt that the risk of this kind of thing was part of the investment decision? Presumably this was high risk, high return sort of stuff. As others say, the mugger is threatening you physically - SBF just cheated (I assume, haven't read the details) at a game, wild west new types of badly regulated investments.
We see this among political figures that swindle hundreds of millions, fail to pay taxes, etc. over and over again. They are granted absolution and even admired.
A mugger is less likely to be deterred by fear of punishments. It usually comes from desperation and impulsiveness, it's not like they've carefully weighed their chances of being caught.
SBF probably thought "If I get away with this I get a billion dollars and if I don't I just get a slap on the wrist and go back to normal life".
I think not letting anger factor into it is good, but we also have to make sure the deterrence is there to prevent the inevitable future SBF.
> I didn't lose a penny and I'm giddy about it. Justice has been done.
How can you be giddy about a human being locked in a cage for 25 years? Would you be giddy if he were being flogged, or hanged? As long as there has been recording, flogging and hangings were common punishments and usually defended as "justice has been done." Incarceration really isn't far from medieval punishments.
I'm by no means suggesting that nothing should be done, and maybe 25 years in prison is a just sentence (that's debatable, but for moving forward let's assume it is), but it still leaves me with a sick feeling. I just can't relate whatsoever with feeling "giddy" over it.
> How can you be giddy about a human being locked in a cage for 25 years?
Said human is responsible for the financial ruin of thousands of people. It's entirely likely that some small portion of those people committed suicide.
White collar criminals, especially those as pedigreed as SBF, are rarely held accountable for their actions. The maximum sentence was 110 years so he got off pretty lightly here and it's entirely possible he serves less than 25 years for good behavior.
So yeah, I'm excited to see an at least somewhat positive outcome here. A criminal was held accountable for their actions.
I don't entirely disagree with your point, and I see the real harm done here. But if I were a juror on this case, I'd have a really hard time being a part of taking away a full third of another human beings' life for what he did. There's no doubt that he knowingly did something wrong, he hurt people, and he deserves some level of punishment. But when I really think about what he did relative to the potential for 25 years in prison, that strikes me as barbaric.
I'd be able to do it easily and sleep at night like a baby.
How many hours, days, weeks, months, and years did he steal from the people who bought crypto in FTX? Most of them were workers, using their wages (which means trading their working hours for money) to buy crypto. How many years of their time did he lose?
If there was real justice in the world, they'd take the amount of money he lost, divide it by the average hourly rate of the account holders, convert that to years, and then make him serve each and every single one.
I think treating petty criminals so badly and going easy on white collar criminals is barbaric. A third of his life is nothing compared to the damage he caused. I find it incredible that you would feel sorry for him.
SBF’s actions caused more damage than many violent muggings. If /u/kbos87 would support letting dozens of muggers to go free to (say) halve SBF’s sentence, then I take the argument seriously and will rescind my positions here so far.
It‘s not a third, it will probably be 1/6 in practice. And what should it be? 3 years? 5? If it‘s just than it will incentivize others to try the same. In fact many do, I know plenty of crypto guys running a bunch of dodgy offshore companies, there is a long tail.
If you think 25 years is too much, I don't think you actually understand what he did, how many people he did it to, and why what he did was bad. Think about the years of savings he destroyed.
Our prison system is undeniable terrible but we also so rarely see white collar criminals get what they deserve. Most of these guys get a slap on the wrist and somehow fail upwards.
And he's almost guaranteed to serve a smaller portion of that time for "good behavior".
Many people see justice served as a win for society, a reason to be hopeful that the future will be better. One life out of billions is valuable only to that person and their immediately family, it would be odd to feel sick over someone else getting punished for defrauding so many others of their life savings.
> it would be odd to feel sick over someone else getting punished for defrauding so many others of their life savings.
that's a pretty extreme strawman of my position. Don't you think there's some spectrum between 25 years of prison time and no punishment? And if you don't, then how would you feel about flogging or hanging as I mentioned above? Does it seem odd to you for someone to feel sick about a public hanging in the town square, even if the person is guilty of the crime?
Very lenient and it doesn't set a deterrent at all for people like SBF. Basically you can go off the charts on the sentencing guidelines and commit 3 counts of perjury in court and still have the same Expected Value as if you stopped the crime at a smaller scale
Not sure I agree. 25 years in prison is life-ruining. Even if he ultimately gets out in 10 (or whatever), his life will be forever changed for the worse because of this, even with rich parents who will get him back on his feet after he's out.
I think the kind of person who would see this sentence and think "eh, no big deal if that happens to me" would probably still not be fazed if he got a significantly longer sentence.
> How can you be giddy about a human being locked in a cage for 25 years?
The guy is a massive fraudster who not only cost thousands of people their savings, but - maybe even worse - he did significant damage to crypto finance reputation.
He was an already wealthy entrepreneur who could’ve at any point chosen not to be a massive fraud.
Actions have consequences. Good riddance.
There's a difference between feeling satisfied that you believe justice has been done, and feeling "giddy".
I think it's awful to have positive, happy feelings when bad things happen to other people, even when those people deserve it. I'm not saying I'm totally immune to feelings like that, but I try to work on my attitude. These sorts of feelings are a stain on one's soul (for lack of a better word, as I'm not religious).
Giddy is maybe the wrong word but I am happy about it. He has acted indifferent during the trial which makes it likely that he could become a repeat offender. This was a strong motivation behind his sentence. If the judge is right in that, and who am I to not believe so, then it is probably correct to remove him from society for 25 years. This is an extremely dangerous individual who may lead hundreds or thousands to financial ruin and is indifferent about it.
> Incarceration really isn't far from medieval punishments.
Sincere question: in your ideal world, what would be done in this case?
I, too, am dubious that 25 entire years serves justice. On the other hand, many victims' entire life savings wiped out, hard-working people impoverished. How do we deter or redeem, here?
To answer my own question, in an ideal world, SBF would voluntarily work every day to pay everyone back.
> Sincere question: in your ideal world, what would be done in this case?
Great question, and very hard. I don't really have a concrete answer, but generally speaking in my ideal world justice would focus on restoration to the victims. I concede that we may need some aspect of "punishment" to serve as a deterrent, but I think that punishment should benefit the victims, not the state. For example, stole $10k from somebody? Pay them back $25k. There should be no victimless crimes IMHO, and if "society" is the "victim" we should approach that one very skeptically and there should be very clear causation. For example, a dad who takes a few hits on a cannabis joint before bed is not "harming society" even though that has been the justification for draconian drug laws for decades.
I also fully concede that real life is going to be a lot messier and more nuanced than what I've captured, and that such a system would require a large mindshift from society in addition to just systemic reform. It may take a while to get there.
Disclaimer: If I actually had any ability to influence this I would want to spend a lot more time stuyding it and examining current research/science, and it's quite possible my opinion would adjust based on evidence.
Sure, and that certainly means any rehabilitation would be harder, and we'd be right to be skeptical of the results of that rehabilitation (as in, is he just pretending to be rehabilitated).
Ideally, a much higher-tech system would have highly tailored solutions for incapacitation, rehabilitation, and restoration. (There should be no considerations for "retribution".)
I'm conflicted on whether incapacitation should continue only until rehabilitation is achieved, or also until restoration is completed.
Prison is just a really blunt instrument for incapacitation, and sentences are a really blunt way to predict how long it would take to be rehabilitated.
> Ideally, a much higher-tech system would have highly tailored solutions for incapacitation
This is pretty interesting. If a person could be anesthetized for the entire sentence and then revived at the end of their period of incapacity, would that be acceptable?
Oh, I understood "incapacitation, rehabilitation, and restoration" as a sequence of activities. Like after a period of incapacitation, rehabilitation is performed on the human and then restoration.
What types of rehabilitation activities would you suggest for SBF during incapacitation? Would it include job training for an alternative career since he is unlikely to be allowed a fiduciary role in the future? As I understood it, he had a great talent in video gaming.
Apologies, I intended incapacitation as not unconsciousness, but finding a narrowly-tailored way to prevent the offender from re-committing the crime, in order to protect society. Ultimately, rehabilitation is the answer on how to do that, but until rehabilitation is completed, some manner of incapacitation or restriction is necessary.
I don't know enough about SBF's crime, which is very complex. But for white collar crime in general that isn't wanton indiscriminate violence, imprisonment seems like it is inherently punitive and thus wasteful, unless it's in a place that is highly focused on rehabilitation (education, therapy, etc).
I interpreted it as literally “remove the capacity (to continue committing crime)”. Incarceration is one means of achieving that, but possibly not the only, and I feel like the OP was trying to draw that distinction.
I don’t think they were meaning incapacitation as in rendered unconscious.
That's right, thank you. I didn't realize it wasn't commonly used in this context, and completely forgot about its other meaning. :) Yes, ideally the concept of "protecting society from the offender re-offending" should be narrowly tailored to only prevent those offenses, and only if those offenses present risk to surrounding society.
The difficulty of doing so doesn't obviate the necessity of doing so.
At worst, he works for the rest of his life with his wages heavily garnished. If he holds investments, he'd be required to liquidate and surrender some percentage of them periodically.
Of course, someone in his position could just live off his parents and not play ball. So you'd need a contingency for that. Maybe prison still does have a place, but only for people who refuse to even try to make amends for what they did?
Justice is not opposed to empathy. Everyone should look at SBF and feel empathy, and think, "losing the prime years of my life as he will would be horribly painful. Maybe I shouldn't commit fraud and steal thousands of people livelihoods like he did?"
Last I checked he’s not going to Treblinka. If you’re feeling sick about this you obviously need to read the court case and look into what low security federal prison is like.
I'm not giddy or anything like that. Our prison system is terrible, and our legal system is often unjust. But I think I'm... satisfied? that a white-collar criminal is experiencing consequences for what he's done. Too often these sorts of people get away with a slap on the wrist at most, and go on to commit more grift.
After a new-years eve terrorist attack in Europe a few years ago, a former colleague (who was in a different country) told me she “would now never go to a public space for a new year celebration”. But she drove a car to and from work every week day. We over estimate the risk of things we have no control over, but as soon as we have even a little bit of control, we underestimate the risk.
Did you learn your lesson to stay off of the crypto? If not, then that's why you feel nothing. It's part of your continued denial that crypto is pure evil. What's it going to cost you to ditch it, do you think? Another ten grand? More? I'm curious
It is probably because there is a difference between getting mugged and being scammed. With falling victim to SBF's scheme, you probably believe you are partly to blame and you had to face that fact yourself, did some work on it mentally at the very least in the background. Him getting punished does not make a difference, you probably punished yourself and that is what mattered. With a violent mugging encounter, you are blameless, so you need to see the other party get punished to process and to feel that the world will get slightly better / safer with the delivery of the punishment.
> With a violent mugging encounter, you are blameless
I was mugged a decade or so ago, and while I was certainly angry with the people who mugged me, I also punished myself a bit: I shouldn't have been walking down that particular street at 2am; I'd had a bit to drink and should have called a car. Or I should have been paying more attention to my surroundings; maybe I would have seen them early enough to get away, etc.
The point isn't whether or not the thoughts I had were rational. I don't think the type of crime matters; victims always have plenty of room to assign some blame to themselves, or at least second-guess their actions.
I think there are millions of poor people in the world who would very much disagree with that statement. But I'd hope they'd still agree that their stuff isn't worth their lives.
I lost hundreds of thousands of dollars with this guy. I was hateful when this whole thing was unwinding. Now I’m indifferent — I just hope John Ray can make the customers whole
For me, I don't think I feel the same way as you (my loss was small). There have been many cases where white collar crime which has similar (or greater) financial ramifications as the example of mugging you give, but the punishment is generally significantly lower (if at all). Granted a mugging could have differing levels of direct emotional impact, but white collar crime generally ends in lighter sentences.
I think “violence” is at times such a silly measuring stick for modern justice.
Instead, we should see it as lost/ruined human potential. What is worse, violently robbing one bank of $10k, or “peacefully” robbing a massive number of people for billions of dollars?
I sure as hell know what I think, and it’s absolutely not in line with SBF’s sentence. He should rot in Ryker’s with people who have, unfortunately, done less harm but still found their way there.
25 years will be enough to where he’s doing time, wish it was more. Sadly his parents have enough cushion to where he won’t have to work when he is out.
Many people are in prison for doing less harm and for longer sentences than many white collar criminals.
It is _obviously_ healthy to forget about it and move on. Having said that, any anger at the guy is going to be not because he effected any one person, but because he effected so many - and because he embodied a particular attitude in the cryptocurrency world that lives on in so many others who haven't yet had their luck run out.
> I understood everyone would be made whole at some point
That is only true if you define 'made whole' as giving back each customer the amount of money denominated in USD that they deposited with FTX. That is super convenient for FTX, which has benefited from the spike in BTC value, but not for the customer. To really be made whole, they would need to get back exactly what they deposited. 1 BTC in? 1 BTC out.
When you invest in monopoly money where the main feature is eliminating institutional protections, don't be surprised that institutions refuse to protect the value you pretend it has. The US government has no obligation to recognize BTC as a measure of fungible value.
Finally a take I agree with. The victims here are IMHO victims of their own greed. They wanted all the reward of putting money into unprotected and unregulated schemes and now many cry that the risks didn't go their way.
It doesn't make SBF less of a criminal but it does make the victims less victimised.
> They wanted all the reward of putting money into unprotected and unregulated schemes and now many cry that the risks didn't go their way.
Is that not just victim blaming? This was not an investment gone bad, this was stolen funds. It would be one thing if they lost all their money because BTC value dropped to zero. But SBF stole the money.
I really dislike the term "victim blaming", as too often it's used to shut down rational discussion about the facts of what happened. Not saying that's what you're trying to do here, but...
Often a victim of a crime could have taken different actions that would have prevented their victimization. That doesn't necessarily make it their fault, or even assign some portion of the blame to them. It's just a fact of circumstance.
A decade or so ago I was mugged by three men while walking home from a bar on a deserted, poorly-lit stretch of street at 2am on a Tuesday morning. It wasn't my fault that it happened, but I could have made other -- better -- choices leading up to that which would have prevented it from happening to me. We can argue whether or not it would have been reasonable to expect me to make those better decisions given my circumstances before getting mugged, but those are still the facts on the ground. I did not need to be walking home; I could have called a car or taken a bus instead. I did not need to be there, at that time, with my judgment, reaction time, and situational awareness impaired. This is about outcomes, not blame.
If I were looking to make some money and had a choice between buying conventional stocks or buying crypto, I'd hopefully consider the risks beforehand. By now I think it's fair to assume that most people who might buy crypto should have heard about a variety of scams, fraud, and outright theft that have occurred in the crypto space. All other things being equal (they're not, but let's say they are), a decision to buy stocks vs. crypto should take into account the expectation that there's a higher risk of losing the money to a scam when buying crypto. Again, that doesn't make it the crypto-buyer's fault when the person/company holding the crypto wallet for them steals it. But it's true that the crypto-buyer could have made different -- better -- decisions up front to avoid the possibility of that outcome.
I'm not blaming the victims, I'm blaming everyone involved, at any level. You consider them victims, I consider them to have discovered the "find out" half after "fuck about".
If I run about in the road and someone runs me down, I may be the victim of driver, but also my own stupidity.
Suffering the consequences of one's own decisions doesn't automatically infer victim hood by someone else entirely.
> The US government has no obligation to recognize BTC as a measure of fungible value.
And the very next reply says these are unregulated schemes. So what does the USG's opinion on BTC have to do with FTX's obligation to return the assets deposited with it, or whether their renumeration constitutes 'making customers whole'?
> So what does the USG's opinion on BTC have to do with FTX's obligation to return the assets deposited with it, or whether their renumeration constitutes 'making customers whole'?
Given that the USG is the only entity that could legally require these customers be made whole, it has everything to do with it. Depositing US dollars into a FTX account is easy: the government believes in the value of the dollar and will want customers to get back the same number of dollars they put in. A court can and might order FTX's current custodians to do their best to make that happen.
But if a customer didn't give FTX any dollars, but gave them BTC? The USG has no obligation to recognize those Bitcoins as having any particular value, or even any value whatsoever. In fact the government may be incentivized to value BTC deposited at zero, because doing so might free up more dollars to compensate people who deposited dollars, assuming there isn't enough to compensate everyone fully.
I feel like I'm experiencing whiplash. When it's convenient, crypto is unregulated and unprotected. But for this argument it is convenient to refer to it the matter as fiduciary, which implies trust, and declare that the only amount which matters is USD.
You might expect to only get the USD equivalent back, but not for one minute does that make you whole. A lot of money was in fact stolen.
I don't think there's any one definition of being made whole here, and people could reasonably disagree on what that means.
Ignoring bitcoin entirely for a second, I might deposit $1000 in an (unregulated, let's say) investment account. Later that amount -- unrealized, of course -- goes up to $2000. But it turns out it was all a scam and the investment manager ran away with the money. I might think I'm entitled to the full $2000, even though that may have just been a number the fraudster typed into a database, not representing anything real. Or I might argue that making me whole means also compensating me for the lost opportunity cost of keeping the money somewhere else where I could have made, say, 10% in that time. Or I might just recognize that I was duped, there was no investment, my $1000 never actually grew, and that's all I'm entitled to getting back.
I'm not sure that's how I would characterize the situation. The government can certainly treat it as a security, and try to regulate it. But if you participate in an unregulated scheme, you get to keep the pieces when it breaks.
The USD equivalent would still be higher than before due to the USD value of the asset that FTX systems would be reporting - if they hadn't been taken down in a criminal investigation, through no fault of the client.
It's good to process the emotions associated, if truly is none, then great! Still suggest meditating if something didn't get pushed under the mind's rug with the financial loss.
Definitely move on, this case had some external closure where most hurts in life don't.
> Should I feel vindictive? Or is it healthy to forget about it and move on? I'm not sure.
However you feel about it is the right way to feel about it. Everyone copes with things differently. Regardless, it would appear some type of justice has been done in this case.
I'm actually surprised the sentence is this low. This is Bernie Madoff territory.
This doesn't get you your money back. It doesn't even necessarily make you feel better so what's the point? This gets into the philosophy of a criminal justice system.
The noble idea behind the criminal justice system is to be restorative. The offender is to be reformed so they don't repeat their crimes and can become productive members of society. This is why we push for things like education in prison, access to mental health treatment and so on. It's for our collective good. Unfortunately, the criminal justice system in the US is predominantly retributive. We punish to make ourselves feel better. There is a ton of evidence of this and it lays bare other societal issues (eg racial disparity in sentencing).
One big argument is whether heavy sentences prevent others from committing crimes. This has been used to justify, for example, three strikes laws and 10+ year sentences for mere drug possession at the height of the war on drugs. None of this works. Such crimes are the result of over-policing, up-charging by prosecutors and material conditions.
But where it actually works is with rich people. Why? Because you fine a company or a rich person and that becomes the cost of doing business. It's factored in. But depriving the wealthy of their liberty is something the wealthy want to desperately avoid.
Case in point: the Sackler family, who are hugely responsible for the opiod epidemic by knowingly lying about the addictiveness of Oxycontin. If I had my way, the Sacklers would have every asset they own seized and they would all spend the rest of their lives in a prison cell.
Put SBF's sentence in context: this Californian man was sentenced to 10 years for carjacking and robbing a gas station with a BB gun [1]. That's roughly half of SBF's sentence. Who do you think has done more societal harm?
The point of the system is to remove threats from society. It should be long enough such that the person will never pose a threat to society again. Justice was served in this case.
thats one of the purposes. As usual Judges are not as dumb as people think. There are plenty of people who have commited crime who are exceedingly unlikely to commit it again (most murderers have a lifetime average of 1). There are more factors, punishment being one.
i don't why this is downvoted. it seems pretty logical to me. if someone commits a crime and then goes to jail, they can't commit the crime again, right?
Maybe had already internalized the idea that money "invested" in crypto is doomed to theft, or collapse. Slot machine players have a similar vibe -- the money is already gone, even before it enters the machine.
which one would make you more angry: 1) being mugged in full daylight in an area with low crime rate (maybe near where you live) 2) being mugged walking in a dark alley somewhere in the "bad" part of the town?
How about if you chose going to 2) knowing very well that muggings are a real possibility and you should probably not go there?
It’s ok and normal to feel both. If I lost tens of thousands of dollars, I’d be thinking of how much that would affect either the timing or the quality of my retirement. That would tend to make me inclined toward feeling pretty damn vindictive.
And yet, the damage is done. Feels of anger and vengeance are withdrawals from your balance of available happiness and they don’t actually affect the end result. The money’s gone. Mourn it, accept it, and move on.
I’d totally forgive anyone for wishing bad things on him if he destroyed their investment. It’s better to forgive, but sometimes that’s asking a bit much.
Hilariously with crypto, that's not necessarily true, for better or worse. The change in valuation of underlying crypto assets means that customers can sometimes be made "whole" - meaning they get back the value in USD they put in, but not including inflation and interest, so they're still poorer than they would be, but at least not out the whole amount.
It's still not resolved, but it's possible creditors in Mt Gox will be made whole. 1 BTC was worth $760 when Mt Gox went down. Today 1 BTC is around $70k, meaning they have almost $10 billion in BTC with which to pay back creditors.
Honestly I feel more vindictive toward the IRS and CA FTB who steal way, way, way more of my money and don't do anything useful with it. I still get cars smashed and I don't have free healthcare or high-speed rail.
In 2022, the average murderer in the Federal Southern District of New York (N = 58) was sentenced to a median of 231 months, which comes out to 19 years and change.
No crime of any type had an mean or median sentence higher than 25 years; most were far less than half.
So it should be really hard to argue that this is a "light" sentence. If anything, it's excessive if you consider the nature of the crime relative to the nature of murder or kidnapping.
"AUSA Nicolas Roos: Samuel Bankman-Fried stole $8 billion dollars. It was theft, from customers spread all over the world. It was a loss that impacted people significantly and caused damage. I want to address a few of the new victim letters"
"AUSA Roos: They lost their life savings. A man who lives in Portugal - the day before bankruptcy his daughter was born. He was marred by the ominous specter of financial instability and his daughter's future. Then there's the 23 year old from Morocco"
"AUSA Roos: He is the eldest son. He kept money on FTX not to loan it out to the defendant but for family's security. One more - a couple in the later stages of their life, late 60s, they invested with life savings. They were depressed, they had to go back to work"
I have not been following any crypto news POST mtgx and pulling all my crypto to local storage. What did this guy actually do? Did he mismanage funds or literally took money from poeple and stashed it away?
Additionally, they outright lied about things like their reserves. The website had what claimed to be a real time ticker showing the reserve level that was actually a weighted random number. SBF claimed that he fell victim to poor risk management, but the more investigators dug in, the more evidence they found that there was organized corruption.
See from your citation, emphasis mine: "AUSA Roos: He is the eldest son. He kept money on FTX not to loan it out to the defendant but for family's security. One more - a couple in the later stages of their life, late 60s, they invested with life savings. They were depressed, they had to go back to work"
Savings should be handled appropriately as savings, not investments or "savings". SBF stole money, but there is a point to be made that people might also need better education on handling their own money.
What? It's completely not beside the point. This was fraud - he stole peoples' money. That 60s couple could have played it "safe" and kept their life savings in a regular bank account, and the owner of their bank could still have attempted to steal their money. That would also be fraud, and they would have gone to jail. This crime is nothing to do with whether bitcoin is a risky investment.
What do you mean by "handled appropriately as savings"? Cash is riskier than stocks over the long term. Investing is the safe way to handle your life savings.
Yes it is fraud, and yes it is besides the point. If people are investing their life savings they would have lost that money one way or another eventually. It's unfortunate the loss was caused by a fraudster, but if it wasn't SBF it would have been someone else.
I am not saying this is an either-or, I am saying that fraudsters like SBF should be thrown in jail and left to rot and people should be taught better how to handle their money.
Yes deposits made with banks still carry risks, but you know what? Most banks are backed by the government (or at least they are in the US, I assume similar setups exist in other countries), meaning depositors generally will not lose their deposits even if the bank loses money. The failure of Silicon Valley Bank is a recent demonstration of those safeguards for peoples' savings at work.
Savings are, literally, savings. You should not be spending your savings, much less your life savings, on something as frivolous as investments which are all fundamentally gambling. Investment monies should come from your spending money, money you don't mind losing. If you are investing your savings, you are investing wrong and you need help from a proper, good accountant.
You know you can hold USDC on crypto networks? The value is stable at $1, so its not an investment, just a way to park your funds. I'm certain FTX had lots of users holding UDSC. Someone could have had their savings in USDC on FTX.
You could at least explain why it's a good idea to throw away your savings in investments, rather than a snarky remark.
Generally, most people do not want to lose their savings. For the poorer people, losing their savings might be straight up unaffordable and something to be avoided at all costs.
Deposits made with banks are understood to be very low risk, that is you can always withdraw what you deposited (eg: your savings) short of the entire sky falling. The trade off of course being that your deposits won't spontaneously grow beyond a small interest dividend.
Investments, meanwhile, can just as likely lose you money as well as gain; high-risk high-reward. Whether it's stocks, business ventures, cars, real estate, precious metals, barrels of oil, collectors' items, or whatever, investing is at its core just gambling on future prospects with no guaranteed returns.
If you invest, you should do so only spending money which you are okay losing. Most people are not okay with losing their savings, hence why I'm saying people who invest by spending their savings are hoisting their own petards and ruining their lives sooner or later regardless if a fraudster is involved or not.
That's fine, investing will on average yield bigger returns (higher rewards) compared to saving. Nobody would invest if this wasn't the case. Investing in and of itself is a good thing.
What you are all seemingly misunderstanding is that I am saying you should not invest money that you don't want or can't afford to lose.
Yes, money deposited in savings might not (and probably will not) keep pace with inflation, but you are guaranteed that you will be able to always take out as much as you deposited. If you deposit $50,000.00 you will always be able to withdraw $50,000.00. Yes, inflation might have reduced the purchasing power of that money to $30,000.00 or whatever when it's withdrawn, but that is not the point: You can always withdraw the $50,000.00 that you deposited.
Meanwhile, if your investments go south you lose money. If you invest $50,000.00 into stocks or crypto or whatever, you aren't guaranteed you can get back at least $50,000.00. It could be $100,000.00, it could be $10,000.00, or it could even be $0.00, but in any case you aren't guaranteed a floor of $50,000.00 in returns. You can (and will) both gain and lose money in investments.
This is why I am saying people should not be using their savings (or even life savings?!) for investing. This is ostensibly money you do not want or cannot afford to lose, this is not money you should be spending on investments.
Invest with money you are okay losing, otherwise you will regret it.
In the UK normal employees are automatically enrolled to invest in their pension (life savings for retirement) and this will be at least partly in the stock market. It is normal and sensible.
In fact I wouldn't be surprised if you could lose your financial advisor's license for suggesting everyone keep their life savings as cash - it's such bad financial advice.
If you keep your life savings as cash you are optimising for the 99th percentile of bad outcomes for the global economy, and losing out massively in every other likelihood.
>it could even be $0.00
It is unlikely that the value of the S&P500 will be zero in our lifetimes. If it is, your 50,000 US dollars won't be worth much.
It's normal and sensible to invest money you are okay with potentially never seeing again, yes. I don't think we are even disagreeing, just probably not on the same page what "savings" exactly is.
I consider savings as monies that shouldn't "just" go away (like investments failing), monies that are expected to always be there for when their time comes. That sort of money should be handled with the worst case scenarios accounted for, you presumably depend on that money (either now or in the future) for your life.
>It is unlikely that the value of the S&P500 will be zero in our lifetimes. If it is, your 50,000 US dollars won't be worth much.
Never say never, the Great Depression was bad enough it took a second world war for everyone to get out of the funk.
You are victim-blaming. Many customers thought they were "savings accounts" that were completely distinct from the investment arm; they were deceived. SBF stole money from his "savings accounts" arm to fund his investment arm.
It wasn't FDIC insured, was it? For example, you can buy crypto with Robinhood, but any uninvested cash is stored in partner banks which are FDIC insured. Even if the CEO of Robinhood wanted to commit fraud, would they be able to? How do FDIC protections work exactly? (genuine question here!)
So was part of it a process failure? Like even when SBF wants to commit fraud in his situation, where should regulations have stopped him?
Pretty sure if the money is withdrawn from the account and sent to say Almeada Research it's not longer FDIC insured because it's not money in an FDIC account.
Not that I'm saying the money was every within an FDIC [1] insured account.
--
Depends on the kind of fraud that Robinhood wanted to do. CEO/CFO definitely have the ability to arbitrarily transfer money amount to accounts they personally control.
FDIC only protects against bank failure, it doesn't save you from somebody credential stuffing your bank to authorize a wire transfer.
Yup, I absolutely am. People who spend their savings (let alone life savings) on investments will end up ruining their lives sooner or later because they are ignorantly misunderstanding what "saving" and "investing" are and what government bank notes and cryptocurrency are.
If you invest money that you do not want or cannot afford to lose, you need help from a proper, good accountant to set you straight.
It is both, because it all comes back to the government's expenditures in the form of public welfare. People who become destitute because they don't know basic fiscal know-how are useless and significant loads to society and therefore the government, so there is vested public interest to teach.
Catch and punish fraudsters, and teach the commons that investments and savings are two very different things and how they should be conducted. Both can be done with no negative impact to the other.
Except we got rid of pensions in favor of 401ks and have basically geared the entire economy to replace any form of social welfare with personal investing.
I’d say “Don’t gamble money you don’t want to lose”. Because let’s face it, you had to have your head pretty deep in the sand to think that crypto is anything else
Any individual stock can tank to 0 as well. Enron would be a good example (fraud), though I see you at least had months to pull some of your funds out.
Hell, even an index fund won’t be safe if there’s another depression. COVID 2: this time even worse could happen at any point, for instance.
Gold might drop if we get asteroid mining going.
Bank runs can wipe out your money.
There’s no entirely safe way to store funds. Property, maybe, as long as the population keeps going up and the government is still functional.
Lol just because everything has risks and rewards doesn't mean that the risk/reward profile is the same for everything, and doesn't change the fact that most crypto trading is closer to gambling than it is to investing
I don't understand this attitude on HN. Crypto is here to stay and not every coin is the same. BTC cracked $70,000.00 this month. I remember buying it at $6.00 in '09.
FTX was one of the biggest frauds in history.. and you're showing us averages. Madoff received a 150 year sentence, and that was with leniency for pleading guilty.
Wasn't Madoff's plan the whole time to pocket investor money for himself, whereas Sam's was to arrogantly (and illegally) gamble it with the thought being he could return the principal from Alameda back to FTX in future? Genuine question, I'm not super informed on these.
Sam paid and loaned to himself $2.2B (and another $1B to top execs) out of the $8B that was lost. That doesn't include the Bahamas real estate; trabuccos yacht; celebrity endorsements; stadium naming; or the private planes to deliver amazon packages to the bahamas.
The idea that Sam was just a risky investor is the story Sam wants to tell. But he already told that story in court, and it was rejected.. because the evidence doesn't support it.
No, SBF did directly steal from FTX users. He used an intermediary (Alameda) to do so. The end result is the same: he stole from customers to enrich himself, his family and his friends.
I'm sure both SBF and Madoff originally thought they would be able to make enough money to cover up the theft.
From what I read Madoff didn't seem to, he never actually tried to invest the money and couldn't really have expected his ponzi scheme to become a permanent engine of the economy or anything..
I don't really think that has the moral conclusion people try to imply though. Thinking they could get away with it as a permanent secret gap that no one need ever know about is actually a worse moral character.
Madoff was supposedly on the level for some 25-31 years. He started business as a broker-dealer and money manager in 1960. Madoff claimed that he started just putting fund contributions in a personal account in 1991, but prosecutors think he was at it sometime in the 1980s, maybe since Black Monday in 1987?
From what I’ve read, it’s not exactly clear that Madoff had a plan, it seems more like he lied to a few people about being able to make them a lot of money, and that snowballed into him taking a lot of “investments” that he didn’t know what to do with.
From what I’ve seen about SBF, it does seem like he has a very high risk tolerance, was betting big to win big, and thinking the reward was worth the risk.
In the short term, sure, but SBF liked to make big risks and it seems inevitable that he would have been on the losing side of a bet that he'd made with money that was supposed to be safer than a treasury bond.
There's no difference in intent described there. Sam's plan was to pocket investor money for himself (and maybe return some of it, eventually, if his gamble paid off)
I'm pretty sure Madoff returned some money before being found out, too.
It's pretty lenient in Canada. Child rapist murderers can apply for day parole in ten years (where yes, they let them scuttle off into society unattended) and permeant parole in 25 years. Families are continually retraumatized every few years in that system by having to beg parole boards to not let out the freak that stalked, kidnapped, raped, killed and dismembered their daughter or mother. They never get to move on.
Yeah, I think the guidelines are correct to think about all staggeringly large amounts of money in the same way. If you steal $600 million, you probably would have stolen $10 billion if you could.
> If anything, it's excessive if you consider the nature of the crime relative to the nature of murder or kidnapping.
I suspect the resulting number of shortened lives amongst all the people who lost $8 billion worth of their money due to the fraud is more than the number caused by a single murder.
This stuff can ruin multiple generations. Poverty is (obviously) correlated with violence, abuse, depression, various forms of trauma, exposure to/victimization by crime, addiction— basically anything that increases despair.
Just because you put on a suit and mask doesn't make it okay.
That's not the point being made. However if 10,000 people lose 2000$ due to mysterious market forces, you bet this will contribute to some losing their lives.
I thought the “lost” money was simply due to poor accounting and actually found.
> Kaplan said he had found that FTX customers lost $8 billion, FTX's equity investors lost $1.7 billion, and that lenders to the Alameda Research hedge fund Bankman-Fried founded lost $1.3 billion.
Clearly the real crime is bilking investors out of their money. It’s also questionable whether they even ended up losing money given the rising price of crypto in the past year. It’s also interesting how this happened:
> when it filed for bankruptcy after traders pulled $6 billion from the platform in three days and rival exchange Binance abandoned a rescue deal.
So basically the traders did a bank run and Sam ended up going to jail. It’s interesting that by contrast SVB leaders didn’t face any repercussions because they were part of the established ways of doing things even though that ended up being very costly for the government.
> It’s also questionable whether they even ended up losing money given the rising price of crypto in the past year.
Shkreli dealt with the "making people whole/replacing money you took": it's not okay to steal or defraud people just because you later make them whole or they don't even realize that you did.
But even moreso, to your point: Please don't conflate the rising crypto price with SBF's intent. He didn't care about that. The fact that crypto rose and may have lessened the losses is entirely orthogonal to his intent, just a "fortunate" coincidence. It could equally have cratered. The people who are being recompensed are only being recompensed in part because of something entirely outside of SBF's control and intention.
The only reason people can be made whole is because SBF was arrested for fraud, and all the funds got frozen. Given his track record, had he kept steering the firm for another year or two, he would have almost pissed away all the gains/potential gains from the crypto rally, and his customers would have found themselves in an even bigger hole.
Also, Bernie Madoff could have just taken a ten year timeout, bought and rode the S&P 500, and had made his customers whole, too, so I guess he also did nothing wrong...
> Clearly the real crime is bilking investors out of their money. It’s also questionable whether they even ended up losing money given the rising price of crypto in the past year. It’s also interesting how this happened:
That's not how that works. Whatever purchasing power they were supposed to have that they were deprived of because of his actions results in damages - obviously equal at least to the crypto gains they would have.
You can’t call it a bank run if it’s not a bank! Banks are highly regulated as they are vulnerable to this sort of issue and that’s why there is compensation. A run should not have been problematic for FTX without the fraud.
> the “lost” money was simply due to poor accounting and actually found
What? No.
The “lost” money was bet on red at the roulette wheel. While the firm was in bankruptcy, the wheel stopped spinning and came up red. That was enough to make customers whole to their original deposits. But it didn’t make up for capital gains, opportunity cost or the emotional damage caused by having your funds locked away for years.
> interesting that by contrast SVB leaders didn’t face any repercussions
Totally different situations. The analogy would be PayPal freezing everyone’s accounts for 3+ years while they put all the money into Peter Thiel’s hedge fund.
I would like to recuperate the cash value of my pre-crash SVB stock, even if it's 3 years later - please & thank you. Their complete lack of risk oversight for HTM assets definitely borders on negligence...
> It’s interesting that by contrast SVB leaders didn’t face any repercussions because they were part of the established ways of doing things even though that ended up being very costly for the government.
Why is it interesting? SVB leaders didn't engage in fraud or money laundering.
> When dues and the proceeds of bank liquidations are insufficient, it can borrow from the federal government, or issue debt through the Federal Financing Bank on terms that the bank decides
It’s not fully funded by the banks & borrows from the government when it’s short. I don’t know how to account the government borrowing from itself, but I wouldn’t think it’s necessarily “free”. Yes it does get paid back, but you’re borrowing on very preferential terms that aren’t available to the public so there is as cost to the broader economy.
> It’s not fully funded by the banks & borrows from the government when it’s short.
While it's true that the FDIC is "backed by the full faith and credit of the US Government" it is funded by the banks and by interest from treasuries [0]. Has there ever been a case when the FDIC actually ran out of funds and had to be bailed out?
> During two banking crises—the savings and loan crisis and the Global Financial Crisis—the FDIC has expended its entire insurance fund. On these occasions it has met insurance obligations directly from operating cash, or by borrowing through the Federal Financing Bank. Another option, which it has never used, is a direct line of credit with the Treasury on which it can borrow up to $100 billion.
So yes, it ran out of funds & had to borrow. It has not yet experienced a shock bad enough to leverage the Treasury line of credit but that’s a fig leaf IMO. The 2008 crisis saw the government bailing out banks through TARP to shore up failing banks to the tune of 700B. Without that, FDIC would have failed. So from that perspective, yet it was bailed out in 2008 & the funding from members wouldn’t have been anywhere near sufficient. That’s why I don’t understand the political football around TARP - “the full faith and credit of the US government” would have been meaningless if FDIC failed as that would have sent a giant shockwave of trust loss through the broader population as everyday people would have lost huge savings.
Given that FTX is not a bank, and does not do any sort of (high regulated for a reason) fractional reserve lending ... how exactly can there be a run? All of the assets should still have been there.
You're not replying to the question of how much money/assets -- thought to be lost -- was later found, you're just copy-pasting random details about the case.
> > So basically the traders did a bank run and Sam ended up going to jail. It’s interesting that by contrast SVB leaders didn’t face any repercussions because they were part of the established ways of doing things even though that ended up being very costly for the government.
Because Silicon Valley Bank leaders were nobodies whereas SBF became perceived as a trophy, pretty much immediately.
This is something to be mindful on. When doing self promotion some people start seeing you as an inspiration , many others as a fraud or a human trophy to be captured and paraded around.
Especially in startup communities where groupthink takes over and everybody wants to be the new cult figure of the Silicon Valley or the crypto valley or whatever. People outside that bubble (especially LE, prosecutors and judges) see right through that BS and are specifically looking with a magnifying glass everything that goes on hoping to get themselves a nice trophy on their desk, they want the heads of cult founders. Some would say rightfully so.
We throw people in jail for committing fraud. We don't throw them in jail for making bad investment decisions within the bounds of the law. While I am loathe to defend SVB's management here, your line of argument leads to a world where either (1) everyone commits outright fraud with impunity, or (2) everyone goes to jail. Neither world is any good.
My line of argument is one where the role of a prosecutor or judge or LE of any kind is a very serious one
These people should be spending their free time reading papers and books on how Romans enforced their laws over remote German provinces of the Empire.
Instead they open all sorts of media and like hunters in the forest they pick a trophy that suits their liking and then they just use all their means to collect that trophy.
Or even worse they are not even creative in their trophy hunting quest, they all pile on Trump because by the way he looks and acts he looks like a fraud and advertises his nature thanks to his huge megaphone . So every prosecutor in the Nation piles on him because they want to be the one uncovering this big revelation to the American public...pathetic.
Their goal should be ratio of Money recovered from criminals to money spent for investigations/proceedings. No one operates this way because they are essentially predators, much like SBF and Trump are, just a different kind, but they receive a salary paid for by taxpayeyrs.
I believe that, as a matter of public policy, there ought to be an important distinction between violent and non-violent crimes.
The rationale behind prison, as opposed to corporal punishment without incarceration, is to remove dangerous people from society, so that they don't further victimize the public.
A violent murderer -- of really any type of murder, e.g. of a random stranger, of one's spouse, or a murderer-for-hire -- should be removed from society for society's benefit. The key point is that the needs of society must come first; punitive measures are a secondary concern. As theory goes, this is trivial.
In SBF's case, his ability to further harm the public is absolutely minimal, provided his punishment includes severe restrictions on his ability to access computers and serve as the director or shareholder of any business. I'd sentence him to a few years in jail, as a punitive measure, and then a lifetime of community service and probation. Let him try and do some good, if he's sincere about those stories he tells re his motivations.
You might argue that punitive measures serve a vital function as deterrence, but evidence doesn't seem to support that argument, and in any case it applies far more strongly to violent crime than to financial crimes. As, in the latter, crimes are often amorphous and poorly delineated, and selective enforcement is the rule rather than the exception.
We measure the worth of a life, for insurance and actuarial purposes, at about $10m (and frequently less). Stealing someone's savings is stealing their life, their time, and in some cases their ability to survive (as we have very few safety nets in the US)
Please stop defending white collar crime as somehow more palatable, as somehow a better class of criminal.
To you the value of somebody else's life may be $10M. To society, it varies with time and place. Yet, to the person in question, the value could well be infinite -- it's probably infinite more often than not -- i.e. no amount of money will induce somebody to die. When you kill somebody, you rob that person of everything they have, everything they ever will have, and of the value they've placed on their own life.
But we're speaking of society. Is SBF a physical danger to society? Clearly not. He's not going to rob and murder you if he catches you in the park after sundown. His reputation is destroyed, and from a harm mitigation perspective it should be enough to monitor his economic activity and make sure he isn't in a position to run any more frauds.
If you seek punitive measures, that's all well and good, but it should be done in a way that's equitable and according to a theory of punishment that's applied uniformly. I don't believe that exists, and jailing a non-violent criminal for such a period of time, when extremely violent criminals serve less time and are then allowed to reintegrate into society (often with poor results,) seems both strange and wrong.
Not true; people have committed suicide due to financial losses that they believe have destroyed their life and made it not worth living. If any FTX customers ended up killing themselves over this (I saw a post somewhere upthread claiming that was true, though I haven't verified that), isn't that just as bad? Certainly the intent is different in the case of a murderer vs. someone who incidentally drives someone to suicide by stealing their life savings. But the end result is still the same.
Regardless of that, I'm not sure how I feel about the idea that a person would value their own life at infinite dollars. Certainly I don't want to die, but would I expect or want an unbounded amount of money to be spent in order to keep me alive? No, I don't think so; that feels selfish and would undoubtedly harm others.
And people will do some funny things to help their family, including working a job where eventual death due to a job-related accident or illness is inevitable. While that's not the same as someone agreeing to be killed in exchange for money, it seems relevant. And hell, I wouldn't be surprised if there were quite a few (financially desperate) people in the world who would agree to be murdered in exchange for their family being financially taken care of for the rest of their lives.
> non-violent criminal [...] violent criminals
I really dislike this bucketing. It ignores quite a spectrum of crime: punching someone in the face at a bar is not the same as stabbing someone who survives is not the same as shooting someone who dies. And violent crimes-of-passion are not the same as cold, calculated, planned violence.
I'm just not convinced that a violent crime is automatically worse than a non-violent one.
And the terms themselves are somewhat arbitrary. I would consider it incredibly violent to deprive someone of their savings and livelihood.
I'm not sure what this guy's obsession with violent crime is. What SBF did was incredibly violent. He destroyed the fortunes of thousands of people in a way that caused visceral material harm. I'd rather get punched in the face than lose years of savings.
If you consider the murder closure rate in most cities, selective enforcement of violent crimes seems absolutely normal - the cops simply will not find everyone who kills someone and track them down. They're not very good at it.
This undermines a lot of the certainty of punishment and therefore the deterring factor of law enforcement, of course.
Not sure what you're trying to assert here, though. You bring up selective enforcement, but then describe a lack of competence in solving murders. I suppose both things can be happening, but they are not the same thing.
> If anything, it's excessive if you consider the nature of the crime relative to the nature of murder or kidnapping.
The value of a single human life is not infinite. In engineering and public policy, a value like $10 million / life is typically used to make trade-offs. SBF stole funds far in excess of that.
Secondly, when funds of this scale are stolen, inevitably people wind up dying early from things like stress, and suicides.
One especially hard thing for sentencing public policy is when every crime is compared to every other crime.
It is impossible, I think, to come up with a "ranking" of crimes that everyone can agree on. And because that's impossible, anyone can always point to a sentence of someone else who received too little or too much in comparison.
I understand the desire to scale sentences by impact. But, I personally think it would be reasonable to give SBF the same exact sentence even if he had defrauded people out of twice as much or half as much money.
An often forgotten aspect of sentencing is that once a criminal has done something evil, we still want there to be incentives for them to not do further evil things, as well as to co-operate with authorities.
That can play out into, say, giving both a murderer and a scammer 25 years in prison, provided that they turn themselves in and otherwise co-operate with the legal process.
I'm sure police officers would rather go into houses to arrest people knowing that whatever the suspect has done, they're going to get another 25 years in jail if they fight back. Arresting someone who has no hope at all, regardless of what they do, is simply more dangerous.
As fuming as I am, there are I think 30 attempts and 7 successes out of 100k males per year? so we still need to prove that it is above average. And above average of the median cryptocurrency owner, because they may have a risk profile too.
And then, yes, trial SBF for each of them as murder on top of embezzlement.
The problem is that financial distress is a direct cause of suicide. It’s like Sam shooting one of his clients and claim the death rate among his clients is still below the national average.
You don't need to prove that it's above average. You need to prove that they'd still have killed themselves if SBF hadn't defrauded them.
(Well, really, the opposite: you need to prove that their suicide was a direct result of SBF's fraud. And I don't think that's an impossible -- or even difficult -- bar to reach, here.)
Someone stealing a billion dollars is committing a far worse crime than someone that murders me.
The problem I have with this is imagine what a statistical poll would be if you posed the question "would you spend 20 years in jail for 1 billion?"
There is a good percentage that absolutely would sign up for that, obviously a much different result than "would you spend life in prison to get a billion dollars".
I think a more interesting question would be around risk of getting caught. Like, would you do it if you had a 10% chance of getting caught and going to jail? 20%? 30%? 50%?
> Secondly, when funds of this scale are stolen, inevitably people wind up dying early from things like stress, and suicides.
Let's not forget that the time they spend living before dying of things like stress and suicide will often be quite painful too. Deaths of despair are no fun.
> So it should be really hard to argue that this is a "light" sentence.
The well-considered federal sentencing guidelines put the sentence for this crime at over 100 years. That is, for an anonymous defendant at remove, our legal system believes that 100+ years is a fair sentence for this set of offenses.
So another way of looking at this is because of who the specific defendant is here, the court shaved 80 years off the "fair" sentence. I would consider that a light sentence.
That’s starting from misunderstanding how federal sentencing works - even the prosecutors only asked for half that. Ken White has a good explainer of how federal sentencing actually works and why the numbers people toss around are too high:
"White collar criminals only get sentenced close to the statutory maximum when (1) they are only convicted of one or two counts with very low statutory maximum (say, one count of a crime with a five-year statutory maximum, as part of a plea bargain), or (2) cases involving truly extraordinary amounts of money."
Unlike the Trump case the article discusses, this case involves a truly extraordinary amount of money. Prosecutors did indeed ask for half that, but the court gave only half of the (already lenient) request due to facts about the person who was convicted.
Note that the Madoff case involved a similar amount of money and he indeed did get the big sentence. I suspect that was because he was likely to die in jail given any reasonable sentence, so better to make a show of it. In this case, SBF got a more lenient treatment for a similar offense because he is younger (note that the judge did not believe he has any remorse and still gave a lighter sentence).
Statistical value of a human life in the US is around $7.5 million. Stealing $10 billion is therefore statistically equivalent to killing 1300 people, or pretty close to half of 9/11. That seems like a pretty light sentence to me.
Well he stole $10 billion, imagine all of your friends' friends' friends' friends losing their entire life savings just before retirement. What % of these people are going to kill themselves, how many thousands of lifetimes of work did he destroy, how much stress did he cause, how many of those people are going to suffer for the rest of their lives, and how many early deaths is that going to cause, among direct victims as well as their family members?
Or is it somehow more okay because they're out of sight, out of mind? There's still going to be a real body count for his actions, it just won't be immediately apparent.
Yes, it's ghoulish, as were his actions, but it's too easy to handwave them away as just some techbro oopsie if they're not contextualized like this.
When it's your job to decide which safety equipment to install on highways or whether to install scrubbers on coal power plants, you have to think like this.
Excessive? I don't want to put monetary value on people's lives, but I don't think it's obvious that someone murdering one person has done more wrong than another who stole billions of dollars and ruined the lives of hundreds or thousands of people. Especially if any of those people committed suicide because of what happened, but even if not.
Three people killed themselves after losing everything. The feds used FTX as an excuse to ramp up operation chokepoint 2.0, which left countless startups bankless. It was a light sentence.
Dollars-to-donuts that the vast majority of federal murders here were drug related. Not that I think the that makes it in any way better, but in many ways gang violence is more of a war than an individual, targeted killing. These types of circumstances matter when it comes to sentencing, and I'm not surprised at all that SBF's sentencing is longer than you "average" federal murder sentencing.
It would be more accurate to compare this to a mass crime. 25 feels light for perpetrating one of the biggest and notorious frauds in modern history. Did the judge go to the upper range of the punishment spectrum? There are judges out there who would have made an example out of this case.
Have you considered how many people committed suicide because of SBF? Or how many people won't be able to pay for medical care, will suffer, and eventually die?
It's impossible to knoe the number, but it's arguably non-zero.
He should have gotten the 40 years prosecution was asking.
Money is not just paper with pictures on it. Money represents human labor. So him stealing billions effectively destroyed thousands of lifetimes of labor. If anything, his sentence is extremely light.
I don't think it's a light sentence, but maybe it's not the right sentence. For the punishment to fit the crime, he shouldn't ever allowed to be rich again. I think that's more of a deterrent for this sort of thing.
I say this tongue in cheek, but mostly because I don't know what options judges have at their disposal in these situations.
I'm not saying that people should kill others or themselves because of the amounts of money involved here, and I'm not entirely sure what the minimum threshold is for financial crimes where that becomes an (grim and unfortunate) side effect, but when we're discussing the largest fraud in history it's definitely on that scale. Even though he stole money, the human cost of that is beyond just fractured careers and relationships, undoubtedly because of how humans behave people almost certainly lost their entire lives due to the continuing effects caused only by this crime. That cost in human life should be taken into account here, even if it shouldn't have had that kind of cost.
It's a light sentence by the sentencing guidelines; the judge has departed downwards from what the guidelines would seem to have recommended (we didn't get to see the PSR so we don't know which of the obvious details have been contested).
I haven't gone through that source in detail, but I would assume that includes people who pled guilty, felony murder (ie they didn't directly kill someone, were just involved in a different felony that resulted in someone's death), crimes of passion and other cases where lighter sentences are justified.
Honestly, comparing billion dollar fraud to murder is a bit tricky for me. In the one hand we could try to give a dollar value to a life, maybe a million dollars. But I don’t know if stealing a million dollars is equivalent to murder, since money is fungible and people are not. The government can make the victim of theft whole. For murder, that is not possible.
On the other hand maybe a more reasonable approach would be to treat criminals as people who need to be quarantined for as long as they’re dangerous. If we could identify a treatable disease (a tumor for example) and know with 100% certainty that treating that disease could prevent further crimes, I personally wouldn’t have an issue with it. We have an impulse to punish evil, and severely punish very evil things, but it’s more of a primitive drive than anything productive. (Of course the exception is the extent to which punishment can deter crime.)
> We have an impulse to punish evil, and severely punish very evil things, but it’s more of a primitive drive than anything productive. (Of course the exception is the extent to which punishment can deter crime.)
That "exception" is the productive social instinct of what you call "a primitive drive".
And it's not just deterrence to negate other people's existing criminal intentions. It also prevents the specific individual in question from reoffending, and it also prevents other people who worked with the criminal from effectively spreading their antisocial culture/habits to unrelated individuals who otherwise have no existing proclivities for crime. It's almost about killing the idea, even more than punishing the person.
Having a standard where you're going to say "This is not okay and we absolutely won't put up with it" is vital to keeping a healthy culture where you can walk down the streets safe at night, or keep your money in a bank knowing it won't just disappear. The penalty for crimes has to be at least several times whatever the criminal gained, in order to be a viable deterrent considering the odds of getting caught, plus at least proportional to the harm inflicted, to center your societal structures on empathising and identifying with the victim. There has to be a heavy artificial cost for criminals, because otherwise game theory of the self-interested says that we'll all end up being constantly victimized.
Rule of the law isn't "primitive". I also feel the desire to forgive and quarantine, but with finite empathy, it's backwards to feel for the perpetrators rather than the victims. Look at Russia for an example to see what happens when predatorily selfish behaviors are allowed to go unpunished, and inevitably end up normalized. [1]
> If we could identify a treatable disease (a tumor for example) and know with 100% certainty that treating that disease could prevent further crimes, I personally wouldn’t have an issue with it.
I would consider this potentially much, much worse and more "barbaric" than imprisonment or even execution, as it would almost definitely be done unconsensually and coercibly.
>So it should be really hard to argue that this is a "light" sentence. If anything, it's excessive if you consider the nature of the crime relative to the nature of murder or kidnapping.
How many people's lives were ruined or ended by his malfeasance? He got off lightly.
I found the variance in sentencing data on the last couple of pages interesting. Notably there’s no variances in murder sentencing listed there. Does anyone know why that is? Are judges/juries not allowed to set sentences outside the guidelines for murder trials?
It is bad to steal from lawyers, economists and judges at the same time. This has a negative impact on the court, in addition to the financial harm caused.
The moral of the story, don't rob from rich people. If you rob from poor people, with MLM, or fraud, or money laundering, thats fine. But if you rob from the billionaires, you're being put away for life.
I'm not convinced by that; I think theft in many ways deserves a greater penalty.
Imagine if I rob 10,000 people of $2,000. Some people won't feel it. Others will be suicidal and may even commit suicide partially from hopelessness. There also could have ramifications that last years into the future, and cascade. (Can't buy new car to replace old car, don't have enough money now. Old car broke, missed work, got fired, found new job elsewhere that pays less...)
I think that's about fair and reasonable. It's been said in Europe he would not have gotten more than years and it's probably true. 25 years is a really long time and even if he does only 20, still super long.
Here's a live tweeting of the sentencing hearing; some of Judge Kaplan's remarks are really interesting.
If I broke into a person's house and stole $1000, even if I didn't directly hurt that person, I could expect to get several years in prison, basically regardless of the state. Lets say three years to be conservative on this?
Sam Bankman Fried stole billions of dollars [1], probably often around $1000 at a time from tens of thousands of people. If going with my logic, he should be getting a lot longer than 25 years, upwards of hundreds or thousands of years. Obviously, it's not a linear relationship, the crime was non-violent, first-time-offender, etc. I'm just saying that 25 years seems pretty fair to me considering the magnitude of the crime.
I am one of the victims (well, of Gemini Earn anyway), and I think if I were given the choice, I'd probably sentence him to 20-25 years.
[1] Or at least so grossly mismanaged that there's no real purpose in drawing a distinction.
> If I broke into a person's house and stole $1000, even if I didn't directly hurt that person, I could expect to get several years in prison
Almost definitely not, especially if it was your first crime. It’s pretty unlikely you’d even be caught.
Severity of the punishment has extremely diminishing returns on discouraging future crimes. The only other impetus for a longer sentence is if you think the defendant is likely to commit more crimes when released. Besides that, longer sentences are hard to justify.
I do think that Sam Bankman Fried will commit more fraud the second he is able to. He hasn't shown any remorse, and he just blames everyone else for this mess even when there's dead-to-rights evidence.
Your logic is strange. With robbery, the primary crime is the violence (or para-violent threat), and not the theft. This is easy to demonstrate: the punishment for breaking into someone's home in many jurisdictions is essentially the same, even if you steal nothing.
The owners, the police, the prosecutor and the jury would be far more interested in the breaking and entry charge than the $1000.
In fact, in every state of the Union, if you're facing me whilst committing the act of trespassing inside my home, I can legally punch a hole through your torso with a 9mm.
Many states (15) have a duty to retreat, not everywhere is a stand your ground state (35 states). It's complicated, but most of the time in your home there is an exception.
I specified that the perp is both facing me and in my home (as opposed to my possibly 1000 acre lot - I wish). This scenario is legitimate self defense in all 50 states (unlike some states in Europe)
They specifically mentioned a scenario where someone is trespassing into the home. There isn't a single state that has a duty to retreat requirement that pertains to home invaders.
> Sam Bankman Fried stole billions of dollars [1], probably often around $1000 at a time from tens of thousands of people. If going with my logic, he should be getting a lot longer than 25 years, upwards of hundreds or thousands of years.
Apparently that logic applied to Bernie Madoff. He got 150 years. How are these cases so similar and yet got radically different sentences?
> How are these cases so similar and yet got radically different sentences?
Partially in that SBF's victims will get "100%" back, based on the USD value of their holdings at the time.
Madoff victims, especially the wealthily got a large haircut on their holdings and clawbacks on money they had taken out as far as 5 years back from sentencing.
Also Maddoff's fraud went on for 15+ years, SBF's was maybe a year to 18 months at the most?
These two cases are so widely different that you can't really compare them except at a superficial level, ie they were both fraud, and that's about where the similarities end.
> These two cases are so widely different that you can't really compare them except at a superficial level, ie they were both fraud, and that's about where the similarities end.
I have to disagree on that. Mostly because the order of magnitude of both scams is the same (billions) and both destroyed how many lives?
And sure, maybe FTX victims will get 100% back, but when? How long until you see that money back?
Madoff's system was only a Ponzi; there were no investments; all new clients' money was used to finance returns and withdrawals of previous clients.
SBF's system was to use clients' money to do illiquid investments. Was it fraud? YES, because he lied to his clients and said he didn't invest their money. And that's why he was tried and punished. But was it the same kind of fraud as Madoff? NO.
In law, intent is everything. If you kill someone by accident, or in self-defense, or after planning their murder for years, the law will treat that very differently; yet in all cases the result is the same (the person is dead).
Same with fraud. It's not the same if it's a pure fraud where there is no possibility that the victims will ever see their money back, or if it's a fraud where it's possible they will be made whole, even if that possibility only exists in the mind of the perpetrator, because the mind of the perpetrator is what the legal system is interested in.
Even more, Madoff actually turned himself in. I doubt he was "remorseful", mostly just realizing how insolvent he was, but it demonstrates at least some accountability on his end.
They don't stack like that, there is a curve with points and considerations like if it's your first time offending and the malice involved. Those points correlate to years. Judges don't have to follow the points, but they almost always do and if they don't, may have to explain it or have their case messed with in appeals
You’ve identified one of the primary failures of the courts. As the number of victims raises the punishment for each victim decreases in our judicial system. Victim count is an aggravating factor and should be a multiple when calculating punishment. Instead we have a system that pretends to grant justice but is an actuality a tool of injustice and repression wielded by people whose entire perspective can be effectively reduced to might makes right. Despite our toys and complicated rhetoric we’re still just violent animals holding those with the least autonomy the most accountable and those with the most autonomy can escape the consequences of their violence indefinitely. A mass revolt or protest of the judicial system in the next generation would not surprise me in the least.
> If I broke into a person's house and stole $1000, even if I didn't directly hurt that person, I could expect to get several years in prison, basically regardless of the state. Lets say three years to be conservative on this?
We are seeing this kind of crime on a regular basis in our neighborhood. The cops have pretty much given up. They also mentioned that even if they make an arrest, the bail is set so low, these guys would be out quickly. Overall, my impression is there is zero deterrence for these kind of crimes here (a pretty affluent neighborhood in one of the tech cities in the west coast)
Breaking and entering into someone's house and stealing their cash is very different from having an obligation to pay them out cash and not fulfilling it. While it may be the same amount of money, it's a radically different relationship between parties.
I don't even normally believe in "punishment" because I don't actually think it works. I think SBF will spend 20-25 years in prison, continuously blaming every human on earth except himself the entire time. If he thought what he was doing was wrong, he wouldn't have continued to do it for so long.
That said, I also have no reason to think that if he's not locked away, he won't just do the same or similar scam again. He hasn't shown any remorse, and he just pretends to be ignorant of all the crimes. If not put into jail, I suspect he'd just go to a country with difficult extradition laws and do some other cryptocurrency scam from there. Putting him in jail for 20 years at least avoids it for 20 years.
Punishment does work. What do you imagine instead? Nothing? Quoting [0]:
First, that punishment has three purposes – retribution, rehabilitation, and deterrence – does not entail that each of these purposes must be realized in a given act of punishment in order for that act to be morally legitimate. For example, we may justly imprison a recidivist thief even if we know from experience that he is extremely unlikely to change his ways as a result of his imprisonment and even if circumstances make it unlikely that his particular imprisonment will deter other thieves. Similarly, the fact that a given act of capital punishment may not fulfill all of the ends of punishment does not by itself suffice to make that act morally illegitimate.
Second, while there is obviously a sense in which capital punishment can prevent rehabilitation, there is also a sense in which it actually facilitates rehabilitation. How so? Consider first that a wrongdoer cannot truly be rehabilitated until he comes to acknowledge the gravity of his offense. But the gravity of an offense is more manifest when the punishments for that offense reflect its gravity – that is to say, when the principle of proportionality is respected. A society in which armed robbery was regularly punished with at most a small fine would be a society in which armed robbers would have greater difficulty coming to see the seriousness of their crimes, and in which they would for that reason be less likely to be rehabilitated. Similarly, a society in which even the most sadistic serial murderers are given the same punishments as bank robbers is going to be a society in which sadistic serial murderers will have greater difficulty in coming to see the seriousness of their crimes, and thus will be less likely to be rehabilitated.
I should clarify. I think punishment mostly makes the punishee angry with the punisher. I don't think that they generally feel like they are paying their penance. If they didn't already think that what they were doing is wrong, I really don't see how they are going to suddenly start just because they were punished.
I generally think that the way that Scandinavia does prisons is better. I think that punishing people specifically with the intent of making their life worse is viscerally satisfying (the retribution part of that quote), but I think it's not actually a good thing to organize a society around increasing suffering. The US has a higher murder rate than Western European countries, despite having stricter punishments, including the death penalty. There can be thousands of factors that influence that, obviously, but it doesn't seem to be massively deterring crime.
I think prisons are basically a necessary evil; there are certain people that are antithetical to a functioning society, and so it's probably better to separate them from most people. I think the point should be, though, to not view these things as "punishment" but more "a chance at reformation".
Prisons in the US used to have college education programs, and job training programs, so that when you left you had a means of supporting yourself that wasn't criminal. If I understand correctly, this is still the case in Sweden, and I think that's a good idea.
Now of course, there are humans that are so warped that really no amount of job training is going to help them (e.g. a Jeffrey Dahmer), and at that point you really do just need to treat it like punishment.
I don't know that it will actually "deter" anyone, I think most criminals think they're not going to get caught, but I think it comes down to the much simpler "it's hard to commit more fraud when you're in prison".
I'm not going to say it's impossible, maybe he could be managing this big crypto empire from jail, but it would certainly be harder to do all that from prison.
> I don't know that it will actually "deter" anyone…
I think there is probably a significant number of people who wouldn't normally be criminals, and thus aren't technically being "deterred", but would end up being just that little bit less scrupulous if they regularly see prominent examples of criminal behavior going unpunished.
professional criminals absolutely think about what’s getting prosecuted and how much hard time you’re looking at. It’s a business to them so it becomes just a part of the risk equation.
For the “isolation from society” i think it’s the least compelling part of lengthy incarceration. You can probably achieve the same effect with just house arrest and other such restrictions
I believe he will immediately start new scams and rope in fool me twice grade investors and be very effective if he has a nice WFH environment instead of the filtered mail and computer with no network kind of an environment.
He probably is a higher risk of racking up 25 more years every 18 months than a shank specialist.
That's the thing; I think a lot of the violent offenders who steal money in prison are often just desperate people. They never had a lot of money, so they mug someone and steal the wallet and car of someone that they think is better off with the hope of actually having money. It's still wrong, I don't support it, but it's at least a much more sympathetic action.
People like Sam Bankman Fried are much harder for me to feel bad over. He was never struggling to pay rent or having to worry about not being able to afford groceries next month. He was already well off, and just decided to gamble with other (poorer) people's money because he wanted more money.
This means, to me, that this was a more cold and calculated thing, not something out of desperation or frustration, just greed. Robbing someone that you think is rich is bad. Robbing someone you think is poor is something supervillains do. If he's already been able to square that circle once, I see no reason that he wouldn't be able to do it again.
Forgive me for not crying over how he might actually have to pay consequences for his actions.
Deterrence would involve beheading him this afternoon.
Really, my preferred punishment for him would be a sentence of 25 years working in a non-managerial, non-ownership hourly position in the quick-service restaurant or janitorial fields, earning not more than the Federal minimum.
No, that's bad for us, as we would be on the hook to subsidize his upkeep.
I want him to join the working poor. I'd accept him getting EBT or Section 8 as part of his sentence...maybe.
Everyone keeps repeating "first time offender", but I think that term is kind of misleading.
If I stole exactly one empty car exactly one time, then yes, I'd be a first time offender in the sense everyone thinks it. If I stole a thousand empty cars, and only got caught after the 999th, then sure, legally I'd be a "first time offender", but I would have still committed the crime a thousand times.
This wasn't a one-time clerical error that he failed to report. This was an intentional bit of theft that kept going for years. It's really not a "first time offense", and I don't think it's fair to categorize it as such.
Punishment should be good enough deterrent for others. Otherwise it would be worth for someone to consider to commit a first time non-violent crime to steal e.g. $10m and get 5 years sentence, suck it up (or even commit such crime in country that has good prisons like nordic countries) and then enjoy retirement after still being young (after hiding your cash loot). Most people will never earn such money during 5 years and many will never earn during lifetime.
> Punishment should be good enough deterrent for others.
On that subject: The Russians seem to have leaked videos of the accused ISIS terrorists being tortured: "Though the goriest clips were not shown on state television, the brutal treatment of the defendants was made clear. And the decision by the Russian authorities to showcase it so publicly in court, in a way they had almost never done before, was intended as a sign of revenge and a warning to potential terrorists, analysts said." [0]
Will it work? Doubtful, because:
1. We should never underestimate the human susceptibility to overconfidence — and to rationalizing away warnings from past experience: "Well, when I do it, I won't make their mistakes." (Cf. the first chapter of The Right Stuff, describing several episodes in which a military test pilot gets killed in a crash; with each fatal crash, the dead pilot's colleagues think, How could he have been so stupid? I'd have never done [fill in action]. Yeah, right ....)
2. Plus: That sort of thing just motivates the real fanatics to escalate the cycle of revenge and punishment. (I'm rereading Barbara Tuchman's The Guns of August; she describes how WWI started out in somewhat the same way.)
I don't see any much how this is related. I remember in a book "The (Honest) Truth About Dishonesty: How We Lie To Everyone — Especially Ourselves"
There was a quote something like "We don't lock our doors because we are afraid of people stealing, we lock our doors because it is an easy way to take away the temptation to steal from a lot of people who would otherwise be honest"
Very good book and it showed via study that there is some threshold where at one point more people would be dishonest. It there would be completely no punishment for any stealing (even if non-voilent) I'm pretty sure more people would consider stealing.
TLDR; the idea of a punishment is not to completely prevent such behavior in the future in society but to reduce such behavior across whole society.
Tbh, a bunch of American (high profile) lawyers had estimated that he'd only get a couple of years, max, as he had no prior convictions - and the nature of the case.
I think they must be unfamiliar with the federal judicial system which is almost always on the conservative side of sentencing unless there were some extremely extenuating circumstances. There were none here, this was straight up greed and grift on Sam's part.
In comparison to his cellmate, ex president of Honduras, who got 40 mandatory years this is not a super long sentence.
On 8 March 2024, Hernández was convicted of three counts of drug trafficking and weapons conspiracy and faces mandatory minimum sentence of 40 years in prison.
Sam is a crook, no doubt, but even now I find him a funny figure. His trial defence was awful. He sincerely believes he was trying to do the right thing, so spent his time on the stand defending his actions at length, instead of keeping his mouth shut except to express contrition. This probably cost him years of freedom.
It's strange to say but there's an... authenticity to this that I find endearing.
Silicon Valley culture encourages lying and some of its leaders are the biggest liars. I am more willing to believe that SBF is an earnest product of this culture who got in over his head and caused damage, than that he is some kind of medical outlier.
I met a nice Israeli filmography couple (somewhat known in Israel, I think) in Tulum last summer. After conducting important business, they were telling me about how they were vacating on the back of a nice windfall -- they got paid upfront for an editting/production job which was unprecedented and generous. Implications of lots of money and some "image rehabilitation". They're acting a bit coy about it, and I'm feeling perfectly fine to be nosy.
So they ask if I've ever heard of "S.B.F.". After my mouth fell open and I gasped for air a few times, and demanded some proof, I got to see a not-public interview of SBF. Nothing particularly juicy, but still. I'm a nerd and I love gossip.
Apropos of nothing, other than the world is small, and weird; I guess.
I remember even before he got arrested it seemed bizarre how much PR there was about him. Allegedly it was organic but I'm sure he was paying for a lot of it in anticipation of when he got caught.
Lots of puff pieces came out after his arrest as well which also seemed bizarrely forced.
Nah - doesn't work like that. I had about $20k deposited as USDT and will probably get it back from the receivers. It's rough on people who had bitcoin with FTX though who will only get what it was worth back then ~17k, rather than what it goes for now.
Tulum is fine but I would not ever go again if my friend didn't live there. It's just the intersection of nacros, tourism, cancun spillover, hella overpriced beach clubs. Probably my least favorite place I've been in Mexico, tbh.
I think it’s the hippie aesthetic some of the younger people there have at total odds with its reality that amuses me. Truly more interested in the other parts of the Yucatán though - looks gorgeous.
Bacalar was ... stunning, and chill. Still full of tourists and expats and retirees, but infinitely better vibes than Tulum. Even PDC is more touristy and somehow less... Tulum... than Tulum.
From the article, SBF will likely be out in 2036, at the age of 45. There’s a good chance he’ll get himself into shenanigans again, if not already from inside prison.
Or he could end up like Michael Milken, who went to jail for securities fraud but became known as a philanthropist. As Gandalf once said to Frodo,
Pity? It's a pity that stayed Bilbo's hand. Many that live deserve death. Some
that die deserve life. Can you give it to them, Frodo? Do not be too eager to
deal out death in judgment. Even the very wise cannot see all ends. [0]
Michael Milken got a raw deal. His actual criminal offenses only resulted in $318K of damages and were largely related to facilitating tax fraud by others. He was a piker compared to SBF. The judge in Milken's case gave him an unusually harsh sentence explicitly as a deterrent to others; I suspect it would have actually been lower under current federal sentencing guidelines.
A philanthropist with the money he stole? His entire fortune is fruit of the poisoned tree. Milken is trash. He was in the 80s, and he is trash in the 20s.
No amount of philanthropy washing can erase the damage his done.
I'm not broadly aware of what Milken did but it sounds like he paid the price for his crimes and served his sentence. If he's rejoined society and has had a positive social impact, I'd call that a win.
I think that goes to show the inadequacy of the law more than anything. If he stole the same out of money by walking up to a bank teller, he would still be in jail
I do enjoy the idea that he'll create a prison super economy based on promissory notes for ramen packets and cigarettes that are tracked in some sort of hand-written block chain kept under their bunk bed and shared between toilet water pipes.
Maybe not killed but pummelled on the regular. He might be cut out for crypto fraud but he’s definitely not going to be cut out for such a long stretch in a “survival of the fittest” environment. Any skills he has are worse than useless inside.
Nonviolent offenders don’t rub elbows with convicted murderers. It’s still prison time but I doubt his life will be in jeopardy. None of the people in that security level would risk the privileges.
It also means his co-conspirators will get a much lesser sentence (if any). Kind of disappointing that nobody else will see the inside of a prison cell. Ellison, Wang, Singh and SBF's parents all deserve lengthy sentences.
I hope he gets pardoned. Trump pardoned some straight vermin and I just don’t feel all that much hate towards SBF (I did lose a few thousand). I have to say I don’t see Biden being so blatantly “teamist” though I wish he would.
These are federal charges, not state. In the federal prison system, you do almost all your time, with just a small percentage knocked off the end of your sentence if you maintain consistent good behavior. State justice systems do have a tendency to let prisoners out early for various different reasons but when you get a federal sentence, you're serving almost all of it.
Things actually changed in 2018 with some implementation details of https://en.wikipedia.org/wiki/First_Step_Act. Parole is not given, true; but you can earn a bunch of credit days for participating in non-recidivism activities, which - when combined with good behavior - can amount to leaving prison 30-40% early. Not sure about the details after (house arrest or halfway-house may be somewhere in that mix), but not as grim at that point.
prison is such an interesting concept. violent people need to be physically separated for the safety of the population. but for a crime like this maybe it would be better to just give him 5-10 years in prison but never let him deal in finance again. i would rather have him on a road crew tying re-bar than using up tax payer money in prison...
Prison is also a deterrent for future offenders, if everyone is knows/feels all they will loose is their license to practice finance then you will have lot more financial crime than there is.
It is not a deterrent for crimes of passion or ones of desperation. If you are angry and upset you are not going to be stopped by rational thinking of risk/reward outcomes, similarly if you are hungry and homeless this will not be on your mind and no amount of deterrent will stop when there is little to loose.
You cannot stop murder, rapes, petty theft etc with punishments you can deter white-collar crimes which are executed with a lot of forethought as this is a critical decision making factor.
---
To be clear I meant loosing financial license is not same as loosing medical or legal license, no one is spending 10 years of education and hundreds of thousands of to get one, so it is not much of deterrent to threaten loosing it.
To be a deterrent, it just needs to curb some percentage of behavior. Not stop it completely. Do you think people are murdering at the same rate as if there was no punishment? It could be, but I would bet the numbers would go up significantly.
> maybe it would be better to just give him 5-10 years
No it wouldn't, what an ignorant thing to say. People like this go immediately back to scamming as soon as they leave prison, and some times from the inside.
I sincerely hope more crypto crooks end up in prison as well! I can't stand the noise around crypto. It's a Rube Goldberg machine presented as the next big thing when it's nothing but a magnet for greedy speculators and nothing more.
For those wondering, prosecutors asked for 50 years in prison, defense asked for 5 years. So this sentence is right down the middle. 50 years in prison would have been way too long IMO.
I feel like going right down the middle between what the prosecution wants (50 years) and what the defense wants (put the king's robes and crown on him, then parade him on the king's horse in the city square and announce before him, 'So shall be done to the man whom the king wishes to honor!') is maybe not the right way to pick.
You should use a geometric mean for this sort of stuff. The difference between a one- and two-year sentence is much bigger than 25 and 26.
So that would be 16 years, though obviously, it's foolish to use "right down the middle" as a heuristic for something like this. (The more severe a crime, the more incentive the defense has to pretend like it didn't happen at all.)
I found it a lot easier to understand the harmonic and geometric averages when I learned about the "generalized f-mean". Many averages are arithmetic averages of a transformation of the value. "f" refers to the function which transforms your values. https://en.wikipedia.org/wiki/Quasi-arithmetic_mean
- The geometric average is the arithmetic average of the logarithm. It places emphasis on the ratio between numbers, rather than the absolute difference.
- The harmonic average is the arithmetic average of the multiplicative inverse. It averages values by a constant numerator rather than denominator. For example, the average fuel economy of multiple vehicles makes more sense per-distance, so miles/gallon should be rewritten as gallons/mile.
- The (RMS) root-mean-square is the arithmetic average of the square. Electrical power is proportional to the square of the amperage or voltage, so AC current and voltage uses the RMS average to make the power calculations correct.
No, he can be released after 12.5 years due to time credits for good behavior. Time credits used to be capped at 15% of the sentence, but due to the relatively recent "First Step" Act it's now 50%.
25 years is a long, long time. He's going to spend the best years of his life in federal prison and come out the other side in a world that's moved on without him. 25 years ago the World Trade Center buildings were still standing.
IMO, if we're thinking of sentencing someone to 50 years or life in prison, we should cut to the chase and execute them instead. It's faster and cheaper for the taxpayers, and arguably less cruel.
Unless he dies, gets a pardon, commutation, or sentence reduction first, the minimum he can serve under existing law is ~21 years based on a 25 year sentence and maximum good conduct time.
You're usually a very accurate poster on legal matters, but this contradicts the linked article:
SBF may serve as little as 12.5 years, if he gets all of the jailhouse credit available to him," Mitchell Epner, a former federal prosecutor, told CNN.
Federal prisoners generally can earn up to 54 days of time credit a year for good behavior, which could result in an approximately 15% reduction.
Since 2018, however, nonviolent federal inmates can reduce their sentence by as much as 50% under prison reform legislation known as the First Step Act.
Are you saying the article is wrong, or did you maybe not consider this possibility?
So, yes, I forgot to account for FSA earned time, of which up to 12 months can be applied to early supervised release (essentially, parole, though its not called that) and the remainder for pre-release custody (home confinement or residential re-entry center insteas of prison.) so, by completing the right activities, SBF could be on a parole-like status in ~20 instead of ~21 years, and in custody but not in actual prison in ~12.5 years.
That's not an automatic reduction (or even as close to it as good conduct time), as it requires successful participation in specified activities, but it is generally available except for a defined list of mostly violent offenses.
and a million others correcting the "85%" meme that HN parrots incessantly (not sure why anyone would expect programmers to be experts on federal incarceration nuances)
we don't execute for financial fraud and white collar crimes. I do think prisoners should be given an option for assisted suicide in cases where they get 50+ year sentences, however. Obviously there would be more complexities to that like wait times and mental evaluations.
Wait...why did a public pension fund invest in crypto-related <something>?
(I still don't know what FTXes product was, but clearly it wasn't bare BTC or ETH, implying it was a risky derivative of a risky underlying asset).
FTX was just an exchange. If you invest money into Bitcoin, you will have to do it on some (centralized or decentralized) exchange. You'd expect that FTX would keep your Bitcoins safe in a digital vault somewhere, but SBF did not and instead used customer assets to gamble with Alameda Research.
There are totally good reasons for a pension fund to invest minority assets into BTC, mostly diversification (check out Modern Portfolio Theory [1]). You may calculate the risk that BTC goes up or down, but most people probably didn't expect the exchange to lose the money.
It's not the first time it happened (see Mt Gox), but FTX prided itself on being the most risk-averse. Yet it turned out all of that was based on fraud and fake numbers, fraudulent enough to even fool pension funds.
Btw is that money irretrievably gone? Are those people getting their money back based on the recovered price of crypto? Or did those assets get liquidated long ago into actualized losses?
I think like all these white collar crime cases it's as much about emotion and appearance as actual damage. SBF wasn't a career criminal with multiple past grifts, and he didn't have any violent acts associated with the grift. So he got a lighter sentence. If he had been a part of a crime family, it would have been much longer. I'm not sure that the prosecutors are allowed to bring in tangential loss of life like multiple suicides (bankruptcy, financial destruction) that were no doubt triggered by SBF's efforts to defraud people.
His cellmate, ex president of Honduras got 40 mandatory years.
I think 25 years is not enough for such a massive crime.
>>On 8 March 2024, Hernández was convicted of three counts of drug trafficking and weapons conspiracy and faces mandatory minimum sentence of 40 years in prison.
Many of the comments here about the utility of punishment is very utilitarian, which is ironically fitting since we're talking of SBF.
What I never see acknowledged (or believed) by more lenient people is the fact that adequate punishment (sometimes harsh is adequate) serves to send a message not only to other offenders, but maybe most importantly to non-offenders, that the justice system is worth something.
"Crime doesn't pay" is to me a greater message to people who are not willing to commit crimes in the first place.
> Ross was smeared with unprosecuted, false allegations of planning murder-for-hire that never occurred, were never proven, never ruled on by a jury, and were ultimately dismissed with prejudice.
>The district court found by a preponderance of the evidence that Ulbricht did commission the murders. The evidence that Ulbricht had commissioned murders was considered by the judge in sentencing Ulbricht to life and was a factor in the Second Circuit's decision to uphold the sentence.
I love harsh American justice. In some countries you can stalk, kidnap, rape, kill, and then dismember a child and get less of a sentence than SBF. I have seen terrorists conduct attacks where mass casualties and death occur, they get sentenced to five years, get "rehabilitated" and then go free and do it all again. I have heard people drone on about American prison sentences being overboard but after seeing hundreds of murder/torture/terrorist cases prosecuted all over the world, the US is the only country that gets it right. If you are a danger to society you should be removed from society according to the risk you present. There is no excuse for reoffense.
Yeah they may have got it right on SBF but they get in wrong in plenty of others. See groups of shoplifters clearing out stores in SF in full view because no one will prosecute for example. https://youtu.be/Uo-LIGTHZc8?t=36
Bitcoin is and will always be real currency as long as enough people believe it is valuable (i.e. can be used to transfer value), regardless of how much it upsets hn user la64710.
Lol. "My useful life is over," he says. As if there was anything useful about setting up a fraudulent exchange to steal billions of dollars so he could go play animal house with Caroline in his penthouse.
this is like a lot of tech "philanthropists" they're always ABOUT to do something nice. There's nothing ever stopping them from doing some volunteer work. But first the millions must be made. It's like borrowing good will on credit that's never paid back.
He will have to serve 21 years before early release. There is no parole in federal prison. I heard 5 years are concurrent making it 20 actual years. If that’s the case he can get out in 17 years.
Its a federal case tried by the US Attorney’s office for, and in the US District Court for, the Southern District of New York.
Media will sometimes (because this are in Manhattan) label these as a Manhattan/New York prosecutors or a Manhattan court, but it is federal, not state, prosecutors and court in New York, not New York prosecutors or court.
Nope, it's Federal. He has appeals coming up though. I have no idea what the outcome could be but there's an opportunity for the sentence to be reduced on appeal. Honestly, this sentence doesn't appear egregious or "being made an example of" so IMO he doesn't get a reduction. But, sometimes you get a sympathetic judge?
SBF was a bright kid that was further enabled by his parents and the environment he grew up in. Imagine taking peoples life savings and being on speed while arbitraging exchanges? Thats some real hubris to not reflect that you might make a mistake at some point. The intellectual arrogance further indicts his parents who likely cheered him on.
The article is followed at this moment with an article titled “SBF’s Parents are Heartbroken” with a picture of his parents where both are unhappy, outside in the rain under umbrellas.
I wonder if they considered their role? I haven’t seen anyone accuse SBF of being a psychopath; given that, how does a person become so ethically bankrupt? A: His parents failed to do their job of ensuring that he developed a conscience.
SBF’s actions are his own; but he would never have gotten to where he ended up if they had done their job.
>The suit says that SBF’s father directed where company payments would go, picked out charities to benefit from his son’s largesse, entered into and terminated contracts, hand-picked the company’s outside counsel, made hiring recommendations, and authorized expenses.
>SBF’s mother, used ill-gotten funds from her son’s businesses as a piggy bank for her political action committee.
>The suit says that Bankman, SBF’s father, was at one point drawing a $200,000 annual salary from FTX but that he thought he was “supposed to” be getting a nice, round $1 million. He emailed his son, according to the suit, “Gee, Sam I don’t know what to say here. This is the first [I] have heard of the 200K a year salary! Putting Barbara on this,” he added, calling in the boss’s mother. The suit says that shortly thereafter, Bankman-Fried made a $10 million gift to his parents out of funds from Alameda Research (FTX’s sister hedge fund), then had the couple put on the deed to a $16.4 million Bahamas property with funds “ultimately provided” by FTX.
SBFs dream scenario: With the emergence of ASI which causes an era of super abundance and without a need for economics, everyone forgives the financial crime and SBF goes free.
Then he immediately starts an even bigger scheme to destroy that super abundance, based on some crazy "effective altruism" idea that it's somehow even better for 100 billion people who may exist in the future.
I haven't lost any money because of this guy's doing but I feel it is the right thing that this person is punished severely.
You can say maybe, the people investing in crypto have been 'playing' with money and knew there was risk involved, but stealing is still stealing and governments/juridical systems indeed need to prove that this cannot be tolerated.
the prosecuters might find this a win but from the comments it seems that there is next to no permutations where the general public would've been content.
meanwhile we are seeing "institutionalization" of crypto-related securities to displace the disrupters from the tech space.
It's hard to say. Historically federal convictions were very strict, requiring you to serve at least 85% of your sentence. The First Step Act passed in 2018 significantly relaxed that down to 50% for non-violent crimes[1]. I don't know if there is enough data yet to determine how common or easy it will be for convicts get their sentenced reduced by that much.
> US Attorney Williams: SBF's sentence is a warning to others
Why do they alway say that enforcing the law is a warning? Why isn't it a known fact that if you break these rules you go to prison. Is it that sometimes they let you off the hook and now they're taking the law more seriously?
SBF is 32 years old - 25 years isn't a death sentence for him
Parole is available after 1/3 of term, realistically he won't serve 100%
There's still a chance for him to get something out of his life post jail
> There is no possibility of parole in federal criminal cases, but Bankman-Fried can still shave time off his 25-year sentence with good behavior.
> "SBF may serve as little as 12.5 years, if he gets all of the jailhouse credit available to him," Mitchell Epner, a former federal prosecutor, told CNN.
> Federal prisoners generally can earn up to 54 days of time credit a year for good behavior, which could result in an approximately 15% reduction.
> Since 2018, however, nonviolent federal inmates can reduce their sentence by as much as 50% under prison reform legislation known as the First Step Act.
I’d be in favour of amending the law to expand to cover fraud and corruption. Those are crimes that corrode social trust in a way that is analogous to challenging the state’s monopoly on violence. (And is separate from e.g. theft.)
Prison should be to rehabilitate (i.e. ensure that convict doesn't re-offend after they are released) as opposed to just punish and ruin people lives for their mistakes for the sake of making random commenters on internet feel good. Also, consider that keeping people in prison is very expensive and is not an optimal way for the state to spend you tax money IMO.
Well, sort of. Prison should be a) to rehabilitate, and b) keep the unrehabilitated from doing harm. But the American prison system is not really interested in the first bit. I'd like to see a general change here, but SBF, given his entirely unrecalcitrant behavior, is among the worst people to make the argument with.
How can you rehabilitee someone like him? It can work even with violent criminals, whose crimes was strongly related to the circumstances they were in. A guy like him who stole billions? What could anyone ever do to convince him to not commit fraud again if given the opportunity...
> What could anyone ever do to convince him to not commit fraud again if given the opportunity...
IMO 10 years in prison should be more than enough to discourage SBF from repeating it. And if it is not enough, then 30 years won't be enough either...
Why? What would change in those years? I'd bet that he would be still extremely likely to commit fraud or other financial crimes (if presented the opportunity) after he got out. Maybe letting him keep a few billion would entice him to retire early (not sure if that's the most reasonable option).
> then 30 years won't be enough either
But it's not about deterring him. It's about preventing him from doing any more damage to the society and potentially deterring other people from committing the same crime. IMHO this is one sector where draconian sentences might be actually very effective, people in finance tend to be more rational and calculating than average. If you get a to steal a few billion and maybe somehow stash a proportion of that spending 5 years in prison might seem like a reasonable deal, that's pushing it but maybe even 10, not > 30 though.
> as opposed to just punish and ruin people lives for their mistakes for the sake of making random commenters on internet feel good
That is a strawman.
Besides (potentially) rehabilitation, prison serves to protect the populace from dangerous people who would harm others and as a deterrent to others who can see what punishment they might get if they do something illegal.
I am not claiming prison does a good job of these things, just that its goal is not to "ruin people's lives".
> Besides (potentially) rehabilitation, prison serves to protect the populace from dangerous people who would harm others and as a deterrent to others who can see what punishment they might get if they do something illegal.
It is not like he will be getting away with a slap on the wrist one way or another. I just don't see more years in prison past some reasonable threshold as a good deterrent.
> I am not claiming prison does a good job of these things, just that its goal is not to "ruin people's lives".
> no single crime, violent or not, really challenges the state's monopoly on violence
Sure. And many murders remain unsolved. We treat murder differently from other crimes that result in human death in part due to instinct, but in part because when we don’t it becomes a political tool.
I wonder if there's a name for this rhetorical device: like casually insert shocking statements about atrocities committed by those in power. Chomsky uses it extensively.
why would Biden do that? plenty of his guys got burned by crypto, and the democratic donations are soaring due to DJT's continued proto-fascistic behavior, not via SBF or his family's efforts.
it's like saying Trump could pardon him on the way in -- and might
> it's like saying Trump could pardon him on the way in
That is more likely than a Biden pardon: Trump in his first term was big on pardoning both financial criminals and people involved in political corruption on both sides of the aisle, and SBF is both a financial criminal and someone involved in political corruption (on both sides of the aisle, even), so he is something of an ideal Trump pardon candidate.
I read in the Michael Lewis book that at one point SBF was floating the idea of paying Trump not to run, and asked around for what a reasonable number would be, and figured it would be around 50 billion
He was one of Biden's biggest donors and generally supports democrats.
>Bankman-Fried’s largest donations were $27 million to his own super PAC, which supported Democratic candidates, and $6 million to a PAC that helps elect Democrats to the U.S. House. Bankman-Fried also gave the maximum $5,800 each to support dozens of candidates, mostly Democrats.
>President Joe Biden’s 2020 run for president was one of the major beneficiaries of Bankman-Fried’s donations. Bankman-Fried gave $5 million to a PAC that supported President Joe Biden’s 2020 campaign, $50,000 to Biden Victory Fund, and $2,800 directly to Biden for President.
"The mission of the U.S. Parole Commission is to promote public safety and strive for justice and fairness in the exercise of its authority to release and revoke offenders under its jurisdiction."
The pardon power is constitutionally absolute and unreviewable — the president can pardon for any reason, or none. Some people dislike that, but I personally like it, because it acts as an ultimate safety valve on the state’s ability to persecute an individual.
The question is more "why would the President self-immolate themselves politically for someone who appears to have minimal actual political capital, especially now that they're broke?"
Presidents generally don't suffer much from pardoning the wrong person.
There's maybe one President that didn't get elected because of his use of the pardon. But then, Ford wasn't elected President or Vice President before he pardoned Nixon either.
Otherwise, I'm not aware of a pardon so controversial that it became a major campaign issue. And for a second term President, there's not really any downside.
Because the pattern they usually follow is to pardon the questionable cases (personal friends, people with financial ties to the President, etc.) just before they go out of office.
And in exchange for this "safety valve" you get the potential for absolute and unreviewable corruption by giving one person the authority to arbitrarily override the judicial branch at will. And to do the same with the legislative branch through executive order.
If America mistrusts government so much that it wants the President to be a de facto monarch, it should just drop the pretense at being a republic and have a monarchy already. Or make the oligarchy official and elect a CEO in chief. At least then there's only one head for the CIA to put a bullet into.
The "state" being the federal government in this case and not any individual state. The president cannot pardon state-level offenses, that is at the discretion of that state.
Yeah man, everybody knows this. The question is why would any president BOTHER pardoning SBF? It's an idiotic move. Literally no one is defending SBF besides his lawyers
There is a more than 0% chance we will re-elect a man that has shown that he does not mind partaking in incredibly corrupt business practices out in the open. We don't even know if they would pardon themselves for crimes and has argued that they should have full immunity to do anything, including harming his adversaries. This person would not need an excuse to do anything.
> Ryan Salame, who was the CEO of FTX’s digital markets division, donated millions of dollars to Republican political action committees and affiliated “dark money” groups with funds from FTX’s affiliated hedge fund, Alameda Research, according to the documents. Salame pleaded guilty last month to federal campaign finance and money-transmitting crimes. Caroline Ellison, who ran Alameda and once dated Bankman-Fried, also gave millions to right-leaning nonprofit groups, the documents say.
> Bankman-Fried donated $10 million to a [Mitch] McConnell-linked group named One Nation in August 2022, according to the evidence filed by prosecutors. The money came directly from an Alameda Research account, prosecutors said.
There's little reason to believe any of that influence remains now that he's broke.
> The purpose of those donations, he said, was to fund political initiatives supported by Bankman-Fried. In a criminal complaint unsealed Thursday, prosecutors said they had obtained private messages in which Salame wrote that Bankman-Fried wanted to support politicians in both parties who were “pro crypto,” while working to get “anti crypto” lawmakers out of office.
> Salame doled out more than $24 million to Republican political candidates during his time at FTX, and he was the 11th largest individual U.S. political donor in 2022 according to OpenSecrets.org. In a court filing last month, prosecutors shared “private messages” from Salame that purport to show him explaining how he was used as a straw donor to secretly funnel money from FTX and Bankman-Fried.
> In one interview last November, Bankman-Fried admitted to donating roughly equal amounts to Democrats and Republicans but made sure that “all my Republican donations were dark.” He said he did this because he felt the press had a tendency to “freak” when donations were made to the Grand Old Party (GOP). At the 2022 midterm campaign funding cycle, he said he may have been the “second or third biggest” GOP donor.
Nobody on the left wants to see him walk free, either. His remaining political capital is nill. Politicians only care about rich donors if they remain rich donors.
If you want to believe a known fraudster saying “oh yeah I totally donated to the winning side, but I didn’t tell anyone”, that’s on you. But it doesn’t change the fact that Trump is very unlikely to pardon someone who publically donated to his opponent, and maybe privately donated to some random GOP members he refers to as “the swamp”. And that’s only if we take as fact some guys “oh yeah I used stolen money to make political donations, but I was just following orders” statement as uttered in a trial.
No shit. If you scroll up, I assert "FTX was attempting to buy influence on both sides of the aisle" and mention Salame numerous times. Please don't blame me for a lack of reading comprehension on your part.
SBF's texts to Salame about all this were obtained by prosecutors, garnering a guilty plea. I've presented a number of links to reputable sources, to which your replies amount to "nuh uh", so I think I'm out.
You’ve yet to produce a single bit of evidence supporting the claim that Trump is somehow more likely to pardon him than Biden, which if you could read you’d know is what I contested.
If you're cynical enough to believe donating cash to politicians directly buys pardons - then surely you're also cynical enough to realise the politician doesn't have to uphold their end of the bargain.
It's not like SBF is going to be making any big future donations.
Donors hoping for favours know donations only buy so much; the politician takes the money in order to improve their chances of getting elected. If you want a favour which noticeably reduces their chance of getting re-elected - you won't get it.
I do not expect SBF to express remorse, be a model prisoner, etc. I expect him to royally misunderstand the rules of the game, which he routinely does in formal settings.
> I expect him to royally misunderstand the rules of the game
What a weird take on his behavior. His parents are law professors, he had an army of lawyers working for him at the time, yet he just didn't care and did what he felt like, knowing full well the damage it would do, because that was the whole point. There is no misunderstanding, it was just indifference.
This was true for a long time, but the "First Step" act, passed I think in 2021, increased the good behavior credit maximum to 50%.
Realistically then, SBF is looking at 11.5 years if he can stay out of trouble, which is relatively easy for white-collar criminals in relatively low security prisons.
He's proven repeatedly that he's incapable of abiding by the conditions of his parole. What makes everyone in this thread so sure he'll demonstrate "good behavior"?
Let's be honest here, "good behavior" is extremely easy to demonstrate in prison where everyone else is constantly getting in fights, beating up guards, etc. It's not a high bar and a person like SBF should easily be able to do that.
There is many other ways to get written up and lose time credits like sharing commissary, having too many books, and sometimes fighting is not optional if your cellmates are into stupid things and drag you with them.
It depends if he is sent to a USP like regular federal convicts or club fed minimum because of his connections. Typically club fed you can only get through a plea bargain like Madoff or through years of good time credits.
The big problem for SBF I think is that he's been shown to have "no filter", or no regard for accepted norms. That could bite him even in federal prison (and he has to go to a medium security, I believe, because of the length of the sentence).
Piss off an inmate and get in an even slight altercation, lose some of your good behavior points.
12.5 years would be possible only if he scored 100% on good behavior.
What a travesty of American justice. He'll be out in 12-13 years and will jet off to the mansion he bought for his parents in the Bahamas with his customer's money. You just know the smug felon has a huge BC wallet Caroline is hiding for him. He's directly responsible for the 3+ suicides that have happened due to his deception and theft but he'll live in luxury for his silver and golden days.
And people are on here arguing that this sentence is too long. How laughable.
Shkreli far and away has been providing the most informed analysis of this case. He trashed the letters to the judge from SBF's parents, then Judge Kaplan went on to raise the exact points Shkreli said he would.
It's wild that 99% of the "point" of crypto and a Bahamas-based exchange was to avoid all the laws around securities trading, banking, money transferring (anti-money laundering, taxes, etc), etc and yet when things go south, people still expect the government to come in and enforce a tiny subset of the financial laws they've otherwise been operating outside of.
This is a weird form of "privatize the profits, socialize the losses" but with the benefactors being the people intentionally avoiding all the financial laws.
If you conduct criminal activity while employed, you conducted criminal activity. You can't just walk into work at 8am, kill someone at 9am, and go home at 5. You still did the crime, and can be prosecuted for it.
So let me rephrase your question: can a US citizen file some papers internationally that would permit them to conduct criminal activities in the US against other US citizens.
That's not at all how I interpreted the comment you are responding to.
That is, FTX's customers knew, or most definitely should have known, that FTX (and crypto at large - that is essentially the primary selling point of crypto) was "outside the regulatory financial framework". Yet when things blew up and all these FTX customers lost all their money, there was very little reflection of "Hey, perhaps these financial regulations really do have some purpose.", it was more "I want the government to now enforce the banking laws that I was essentially trying to evade in the first place."
If you look at the superbowl ad, it all looks American style and doesn't say much about offshore. "FTX US all rights reserved." and crypto is volatile it says in the small print. It looked kind of US regulated and US regulators certainly took note when it stole US customers money. https://youtu.be/hWMnbJJpeZc?t=129
SBF wasn't convicted for violating financial regulations (such as maintaining capital liquidity, reporting transactions or meeting KYC requirements). He was convicted of fraud and conspiracy.
Yes, I know, but the type of fraud and conspiracy SBF committed is much easier when you're at a financial institution that essentially has no regulators or auditors keeping tabs on thing.
Just read some of the reports John Ray III, the current "cleanup" FTX CEO, wrote shortly after he was brought in. It was a total clown show, with little to no documentation for things like huge multimillion loans to FTX principals. It's a lot easier to steal money when there is no standardized, auditable paper trail to begin with.
I agree, the average citizen would have expectation that the government would enforce these laws. However, I do think OP can be more clear that when they say "people" here, they don't mean your average citizen, but proponents of crypto who would agree that 99% of the "point" of crypto and a Bahamas-based exchange was to avoid all the laws.
> This is a weird form of "privatize the profits, socialize the losses" but with the benefactors being the people intentionally avoiding all the financial laws.
No, it's, as usual, the government choosing to do the wrong thing with your tax money, because it will be bad publicity not to, because votes, because power.
Yeah, I agree. This should fall under “caveat emptor”. Everyone using unregulated exchanges (which IMO should be an option for everyone) should recognize that they are subject to additional risks (and benefits).
The government shouldn’t outlaw free climbing either.
It’s your own fault if you treat a bunch of foolish kids with millions of dollars the same way you would an onshore FDIC-insured regulated bank.
Climbing pedant checking in. I think the type of climbing you're referring to is free-solo, that is climbing alone with no partner or protection from falling. "Free climbing" is climbing using only hands and feet for upward progression but typically involves the use of protection (gear, ropes, and a partner) to save you in the event of a fall. It's called "free" because the climber does not use metal tools, hooks, pitons, or bolts for upward progression like in aid, ice, or alpine climbing.
I agree with you as well, but this is a major example of how, despite this ideal, something like this can sweep up so many people that would otherwise never interact with a system like this. People who don't know who SBF is, never heard of Hacker News, who don't understand crypto, getting convinced to put money into this by, say, a younger relative. It is a real side-effect of this thing existing on this scale on a planet populated by humans.
People don't go mass free-climbing because it isn't something you do by accident. The danger is obvious. But this danger is abstract, and the ease of entering this type of system can happen with just a few clicks from the comfort of your home. And getting dollar signs in your eyes is a very psychologically influential pull.
It's worth noting that a huge amount of the government's case involved evidence that SBF and team were buying lavish oceanfront condos, paying superstar athletes for weird TV commercials, etc.
This was actually a tiny slice of the overall financial mischief at FTX. But it told well in front of a jury. And it reinforced a big point that prosecutors keep wanting to make, as publicly as possible. "Don't take the customers' money to live large on your thefts!" That's a message that they want countless bookkeepers, financial planners, etc. to hear, again and again.
So, yes, they wanted to make an example out of SBF. The intricacies of FTX's full financial gyrations were sometimes too complicated to put in front of a jury. But the clueless or duped crypto-trading clients got a free bailout anyway. It came on the back of a prosecution that was largely intended to be a public slapdown of a guy committing lifestyle offenses with other people's money.
The article doesn’t say that anything was too complex to put in front of the jury. It says that prosecutors presented the story as a straightforward case of fraud.
>The key at trial, aside from the multiple cooperators, was the way in which prosecutors simplified the case and tried it as a garden-variety fraud instead of as a complex crypto scheme.
Free climbing in populated areas is outlawed (and should be). Try climbing your nearest skyscraper and see how it goes.
Similarly, torching your money on some random shitcoin isn't outlawed. But when they enter populated areas, renaming stadiums and hiring celebrities to try to trick the masses, the rules change.
Its the US Government courts who are handling FTX's bankruptcy. So at a minimum, they are expecting the USA Government to figure out how to split the money / clawback what they can and untangle the mess of the balance sheets (rumor has it: a completely non-existent set of documentation in the case of FTX).
"Expecting the government to bear the costs of enforcing the law" is not generally what is meant by "socializing the losses", even if you can define the expression in a way that that makes sense.
But I'm going to go out on a limb and guess you've never referred to it as "socializing the losses of having possessions in your home" when police unravel a burglary operation and return the loot to its rightful owners.
SIVB stock collapsed and all the investors into SIVB were wiped out. US Government stepped in and started allocating the remaining assets, prioritizing the customers and hurting the bondholders and shareholders.
IE: The shareholders / bondholders of SIVB were basically wiped out. The losses were privatized so to speak, isolated to the investor class.
Sure, you can quibble somewhat -- investor losses are not socialized. However, the FDIC insurance fund that makes depositors whole is ultimately funded by taxpayers.
> However, the FDIC insurance fund that makes depositors whole is ultimately funded by taxpayers.
FDIC funds don't come from taxpayers. *Banks* pay FDIC insurance fees.
Now you can quibble if FDIC is paid by banks, or if you think the "costs are passed onto the customers". But bank-customers are not necessarily "tax payers". At very least, the vast majority of my cash is in VMFXX and SWVXX, so I personally have very little money in Checking/Savings (so I barely pay any kind of "banking insurance" fees in practice, just enough to keep my checking account open).
The little banking insurance that my money is going towards is my Checking account / Savings Account at a local Credit Union as well. Which is NCUA (not FDIC), so a totally different insurance program.
-------
So none of my personal wealth is actually tied to FDIC in any way, despite myself paying plenty of taxes all the time. I'm simply not a bank customer, so there's no way I personally am related to any FDIC related situation.
Murder is still murder even if it’s a dispute between two criminals. I suppose the same is true of fraud. Law enforcement is always a socialized cost.
Though, there are fines. Apparently, FTX might owe $9 billion in fines and penalties and $10 billion other government litigation [1]? The creditors might not get much at all.
I don’t know what the users of a cryptocurrency exchange expect. I think there’s always some chance of a “rug-pull?”
> > This is a weird form of "privatize the profits, socialize the losses" but with the benefactors being the people intentionally avoiding all the financial laws.
It was SBF who put it in the hands of the US by declaring bankruptcy in essentially 3 days instead of playing the long wait game
Also SBF who put it in the hands of the US by staying in the Bahamas and essentially waiting to be arrested (and immediately extradicted to the US) instead of fleeing to Cuba or Colombia or South America. 25ft Inflatable ribs can make that route.
During the first day of crisis he could have gone to Russia too by private plane and pull a Snowden
That ship sailed years and years ago. You can buy Bitcoin ETFs from traditional investment companies (like Fidelity and BlackRock), and those companies aren't in it for the freedom.
More to the point, the IRS has been collecting taxes on Bitcoin earnings since around 2014[1]. Since the government is taxing you, it's fair to ask the government to protect you.
I agree 100%. You want to operate outside the law? That's fine with me, but you gotta accept the risks. However, that means you have to be extra-judicious about who you operate with. I've found it funny to hear crypto proponents scream about how the government needs to prosecute him yet they'll turn right back around and demand that the government needs to have less regulation and taxation of crypto.
Your complaint would be solved with less gray area.
Businesses outside of the US should be able to do business with US citizens _without_ the consent of the US government. This comes with the caveat that if you, the customer, reject the "protection" of the US government, you are completely and totally SOL if things go south.
The hard part is that US citizens may not know they are doing business outside the jurisdiction of the US government. Are you rejecting the protection of the US government if the company is doing its best to obscure that fact and the associated risks? How about if they are advertising in the US? On the superbowl?
If they're putting life changing amounts of money into a company they should be doing a modicum of research on it. If someone gives $100k to a Nigerian prince, I don't think the US government should be spending thousands of dollars of resources on attempting to recover that money.
US citizens have never implicitly been allowed on these off-shore exchanges. You have to deliberately circumvent and lie to get an account.
Let me just provide a counter-point. As an early crypto advocate, and someone who has lost thousands of USD to hackers and scammers, I did not ever expect the government to bail me out. As you said, the whole point of crypto was to free ourselves from these regulations, which means high risk high reward investments, and the opportunity to create truly innovative products. High risk means sometimes you lose your money, even to illegal and unethical actions.
The real tragedy is that NFTs turned into digital trading cards and DAOs turned into pump and dump scams. The really interesting use cases will appear once the USDT Tether books are exposed and Bitcoin price plummets. Imagine NFTs attached to shipping containers tracking custody throughout a series of mutually distrusting last mile carriers. Or DAOs that allow people to organize for collective action with radically transparent finances to prevent corruption and grift.
Of course I'm sure this will not go over well here on HN, where everyone reflexively hates crypto and loves government regulation. It's a bit ironic for a forum where the majority of members are engaged in the business of "disrupting" one or another traditional industry. Of course the industry of finance is too sacrosanct to risk such disruption. Why should Uber have to pay for taxi medallions though?
As a former eth miner and now crypto un-enthusiast, i was attracted to the idea of contract disruption and value transfers utilizing blockchain but ever since the entire industry has become scams, wall street and *bros, yeah I'd love to see it all crash and burn. Exposing tether would be a great start.
Yeah, no, the hate of crypto stems from a fairly well grounded understanding of the technology here. BTW, the good folks at FT Alphaville also mostly hate crypto - there, it stems from a good understanding of finance. Basically, everyone that understands the tech/finance intersection reasonably well hates crypto, with one important caveat best expressed by Upton Sinclair nearly a century ago:
“It is difficult to get a man to understand something, when his salary depends upon his not understanding it.”
Using crypto with or as a custodian never had that standard you are referring to.
Fascinating level of cognitive dissonance that is prevalant in this thread. It’s a mixture of conflating competing ideas, and strawman arguments to discredit crypto users.
Custodians are subject to liability based on their own citizenship, the citizenship of their clients, and the location of the infrastructure being used, it doesn't matter what type of asset is involved.
Dang, we should really flag these non sequitur posts on every crypto thread that appears on HN, we’re almost 20 years in and the discussion level is a large aberration lower compared to other tech topics on HN and other dev and enthusiast crypto forums still, when it should be the opposite. flagging practically everything would promote more substantive discussions by making that point to otherwise well adjusted people, and surfacing the things that work well within crypto to people that otherwise aren’t exposed to that.
I love HN, it's one of the few places you can get reasoned conversation online.
But this is one of those subjects where it gets weird.
SBF was directly responsible for millions, if not billions, of direct monetary loss to identified individuals. Yet the top comments on HN are all discussing whether incarceration is retribution, spite, deterrence, or rehabilition.
The USA incarcerates people for tiny financial damages at a higher rate than anywhere else in the world. $20 of theft? 5 years away, no problem. $1 billion: well we should consider what we're trying to achieve here...
If the USA is going to be consistent in sentencing then just fucking kill him.
Or reconsider and free the thousands of black dudes serving ridiculous sentences for minor crimes.
I've noticed the same trend. HN (as a collective) doesn't believe in punishing white-collar crimes with incarceration. I guess it hits too close to home.
Realistically, I mainly believe in punishing violent crimes with incarceration. Most white collar criminals could be sufficiently contained with house arrest and restrictions on visits/internet access/etc. Just realistically, you can keep a financier in an apartment they pay for, but probably not a good idea for someone who's murdered and burglared.
Who in this day and age is going to jail for half a decade because they snuck a 20 dollar bill out of the cash register when no one was looking?
There are almost always violent actions involved that are conveniently glossed over whenever someone bemoans “life in prison for stealing a loaf of bread!”
It’s almost night and day compared to when Bob Lee was murdered and they thought vagrant or some other (insert stereotype here) was the culprit. Remember how tough on crime this crowd was then ?
Remember the silence and lack of thought pieces when it turned out to be someone he knew instead of some brown person or drug addict ?
Only one person was sentenced in us for 2008 crisis. So, consistent, as in big financial crimes are not punished, because criminals are very close to the people on top.
Violent crime is ultimately more than just monetary damages.
Like realistically, sbf can just be kept in a fenced compound. He's shown no great violent urge. House arrest would probably serve the same purpose of removing him from the population for X years.
Someone breaking into a building is a lot different. They need more security and cause more chaos.
One person was cynical. Everyone else chimed in to correct that person: SBF was "new money" which carries no social status to protect against jail time.
There were dozens if not hundreds of SBF threads; the above link is just one subthread of one of those threads. In each of them, quite a few people would argue he'd never see consequences; his political donations were extensively pointed to as evidence of this.
Yeah, it's been a bit funny to watch the goalposts move. He won't be arrested, he won't be charged, he won't go to trial, he won't be convicted, he'll get a light sentence, his political donations will get him off, etc.
Why, as a matter of interest? These _really_ big, blatant frauds usually do; see Madoff, Holmes, et al. Like, it's hard to see how he'd avoid prison, certainly in the US.
Other noted fraud-y bitcoin exchange guy Mark Karpelès avoided prison after conviction, but the evidence was much weaker there and they only found him guilty on fraudulently inflating MtGox's holdings (a la Donald Trump); also, that was Japan.
(Fun fact; after the collapse of MtGox, Karpelès went into business with Andrew Lee, the guy who broke freenode and claims to be the Crown Prince of Korea. The world of weird internet grifters is small and incestuous.)
He was well connected, especially his parents. Huge political donor. He likely would have recieved a small sentence and somewhat validated my doubt had he not purgured and witness tampered during the trial.
Sure, but, like, so were Madoff and Holmes. Henry Kissinger, _Henry Kissinger_, was on Theranos's board. Rupert Murdoch invested. I don't think SBF really had anyone on that level?
There is a certain point where it no longer matters; such connections would only really matter if they could get the investigation stopped. Once it goes to court, assuming it's a proper court, those sort of connections kind of cease to matter.
The top voted comment in that topic is saying he's going to jail. Just because in a forum with a gazillion people some people have a different one doesn't make it representative of the median/mean/etc.
Also, it's not bad to have a counter-opinion to a group; it is bad to claim a singular opinion is that of the group without any actual justification.
The top voted comment in that topic is also saying "For everyone on this thread making broad proclamations about how SBF won't go to jail", yes? Implying quite a few people held that opinion here?
Sure, at least a few people held that opinion. However, that isn't what the post I'm replying to said.
The post I replied to used the literally lowest voted top level comment as their basis of "HN didnt think he was going to jail". They skipped over all of the higher top level comments when making their post (you have to go to the bottom of page 2 to see the one they picked).
Their post is classic bad faith argument and I think it should receive a penalty (downvote).
If someone isn't a violent threat to society, there isn't much social benefit to keeping folks locked up longer then 20-ish years. 20-25 (assuming he gets the 15% off for good behavior the feds allow) is plenty.
> If someone isn't a violent threat to society, there isn't much social benefit to keeping folks locked up longer then 20-ish years.
This unfortunately widely held belief is measurably wrong and reeks of all kinds of biases. White collar criminals are one of the categories most likely to reoffend. Recidivism is much higher in white collar criminals precisely due to the leniency they often experience and the powerful financial motives associated with these types of crimes.
For violent crime 38.9% of convicts were arrested for new crime within 3 years of release. White collar crime on the other hand had a 58.8% 3-year recidivism rate.
White collar crime poses systemic risks which violent crime doesn't to the same extent. It undermines confidence in institutions by creating corruption and waste, enriching few at the expense of many. When it becomes normalized and widespread this kind of crime can destroy a country's economic and political systems.
I very much agree with your last paragraph. I would go so far as to say that white collar crime is worse than violent crimes because it is the pernicious ability of white collar crime to perpetuate the environment that it flourishes that can lead to the social decay that you're talking about which ultimately causes violent crime.
Another aspect of white collar crime vs violent crime is that there's no real legal concept of self defense against white collar criminals while in most places there's varying degrees of force you can use in response to a violent crime being committed against you or a stranger. With white collar crime a psychopath wearing a corporation can act with impunity and ruin your livelihood in all kinds of ways and there's nothing you can do about it.
> In analyzing recidivism of violent criminals, the
criteria used were any prisoner with two or fewer prior arrests, who
had been convicted of rape, homicide, assault, other sexual abuse, or
other violent crime.
> In examining at white collar criminals, the criteria used were any
prisoner with two or fewer prior arrests, who had been convicted of
larceny, theft, motor vehicle theft, or other property crime (which
included types of fraud, embezzlement, etc.).
I wonder if you removed the "two or fewer" if you'd get a different result.
Feels low to me too. I think the distinction between "violent" is completely irrelevant. I think taking money from people does just as much harm as physically injuring them -- many people would rather have several bones broken than lose their pension.
The benefit is the deterrent. It's especially important for wealthy people who we may wonder if they greased wheels behind the scenes.
If you want somebody to cry about, cry about a man doing a life sentence for marijuana possession, not sbf. [1]
FWIW people have a viceral reaction to extremes of violence that they can comprehend.
When you consider that a 1% unemployment rate increase generally correlates to ~5,000 deaths then you can consider gross financial negligence to have an actual tangible human mortality cost.
We just don't, because it's too indirect and your laywer would argue confounding factors until you are all dead; but don't be mistaken: financial crimes do cost lives.
I've always been in favor of the Norway sentencing model [0]. 21 years is the max prison sentence, with 5 year extensions possible. Punishment must always carry the possibility of rehabilitation and return to society, even in the most extreme cases. A small amount of people will show no remorse or willingness to improve and will remain in prison for life.
Ouch! I hadn't heard of this before, and I gotta say I'm not a fan.
I agree with it only in principle; it seems ripe for injustice in all practical details.
If you maintain your innocence, is that a lack of remorse? Can you be any kind of 'model citizen' in prison - engaging in charity or volunteer work? Who brings the +5 year charge or provides evidence for it? The prison staff who don't find your personable, or the shrink who doesn't think you're taking the sessions seriously (if shrink visits in prison exist)?
> I agree with it only in principle; it seems ripe for injustice in all practical details.
Yep, instead of "you definitely get out of prison after X years have passed" you instead get "you get out of prison in 21 years! (or never, depending on how we feel)".
Per the wiki page, the five year extensions are for the indeterminate penalty, not for any prison sentence. The alternate to this sentence is "We will kill you in prison" or "You will die in prison".
I think that might be the best normal path, but I think there's a (relatively small) population of offenders who we can know have no real prospect of rehabilitation.
Perhaps the more important distinction: if we're going to let people out of prison eventually, we should make sure that prison is a place that is set up in the best way to make that eventual return to society successful. Right now, it feels like we do the opposite.
What do you believe Sam would do if granted a shorter sentence, assuming they believe they've done nothing wrong? Who should carry the burden of re-offense without remorse?
People make mistakes, to err is human, and forgiveness should be provided to those with the capacity to change (ie harm less). Compassion is important. But if you don't believe you've done anything wrong, can we not project future potential outcomes? Prison duration is a risk assessment of harm reduction.
EDIT: Prison should still be about rehabilitation and treating humans humanely, to be clear.
> The difference is society gets 12 additional years of safety which it wouldn't get otherwise.
Naturally, by this logic I have to ask: why not 32 years? 52? 102? Aren't we doing society a disservice by ever allowing criminals to leave prison?
> Ostensibly
I chose this word carefully, because I think a lot of our preconceived notions on criminal behavior have not been validated by the real world, including the deterrent effects of long-term imprisonments.
> Naturally, by this logic I have to ask: why not 32 years? 52? 102?
Because the sentencing judge applied the guidelines provided by law as written by legislature, considered case-law, the specifics of this case and applied their professional judgement to come up with a 25-year sentence as an appropriate one for the crimes committed. If the defendant disagrees, they can appeal the sentence to get a second opinion.
You're attempting to reductio ad absurdum prison sentences - I'll apply it to your argument in turn - why send guilty people to prison at all? What's the difference between 1 day imprisonment and 60, or 6000? A sense of proportion is the difference between a black-and-white world and the one we strive for in reality.
> Because the sentencing judge applied the guidelines provided by law as written
We know the mechanics of why it was chosen. What I was asking was by your logic, 22 is less protective of society than 102, which makes me question the validity of "it protects society" reasoning. Why protect less when we have a quantifiably greater level of protection?
> You're attempting to reductio ad absurdum prison sentences
This is incredibly dismissive. We have arbitrary sentencing guidelines. They are based on reasoning, but that doesn't mean they are correct. They are fluid, change from locale to locale, and have unpredictable efficacy.
> why send people to prison at all? What's the difference between 1 day imprisonment and 60
You see, I don't think that's reductio ad absurdum at all. It's a valid question. You can argue for it and against it, but it isn't absurd or contradictory on its face.
> A sense of proportion is the difference between a black-and-white world
All you're saying here is 6000 > 1. We know this. I'm asking why 6000 is right, 1 is wrong, and why we throw away the other 5998.
> What I was asking was by your logic, 22 is less protective of society than 102, which makes me question the validity of "it protects society" reasoning
The answer to all variations of your underlying question in your post is because when handing down sentences, there are multiple, oft-conflicting considerations. We don't only consider societal safety - if we did we'd just jail everyone for life.
6000 is right because it is the right point of balance between keeping society safe and the rights of the imprisoned, while reflecting the seriousness of the crime without being cruel or unusual. Prison sentences inherently take away rights from the prisoner, and this is yet another thing that's thrown onto the pile of considerations for tradeoffs which individually lengthen or shorten the term of imprisonment. It's not a binary decision like you propose (imprisoned vs not imprisoned for any crime), but finding the right balance point (likely region or volume) on multidimensional axes.
I'm not a trial judge, but I can think of the following factors off thr top of my head: nature of crime committed, remorse, amount of harm, restitution (if any), sentencing guidelines in the law, probability of recidivism, safety of society, safety of defendant, sentences issued on similar cases in the past, appeals on similar cases in the past, prosecutor sentencing recommendations, defense sentencing recommendations, time already served, culpability, the number of charges defendant is found guilty of and whether they can be served simultaneously or not, etc. You're ignoring all of these and projecting the sentence to a single dimension (societal safety).
You haven't answered why you think we imprison people in the first place (or if we should). We cant have a fruitful discussion about which sentence durations are "better" without knowing what metrics we are measuring.
> We don't only consider societal safety - if we did we'd just jail everyone for life.
This is why I asked why 22 was right and 32 is wrong. "Because the judge said so" is no more useful than my asking "why heads?" and you answering "because that's where it landed when I flipped it."
There might not be a "right answer," and I'm ok with that. But it's odd to decide it's right simply because an authority decided it was.
> You're ignoring all of these and projecting the sentence to a single dimension (societal safety).
I'm not ignoring them, I'm simply responding to the reasoning you gave. By your metrics, 22 gives 12 more years of societal safety than does 10. This is what you responded to me, and I'm trying to point out that I believe it's flawed. If there are more factors included, it doesn't make this reasoning less flawed, it's just a smaller slice of the judgment's pie.
> You haven't answered why you think we imprison people in the first place (or if we should). We cant have a fruitful discussion about which sentence durations are "better" without knowing what metrics we are measuring.
Perhaps inadvertently, I think you hit the nail on the head. We don't have metrics that validate or invalidate any of this. We rely on a set of arbitrary guidelines mediated by emotions and feelings. In a great many cases, I don't think we're accomplishing anything but pushing a problem away and pretending we fixed it.
Forgive me for going meta: Your "Socratic method" falls short when you ignore obvious context. You assumed the liat of reasons I stated was exhaustive, I clarified in my reply that it wasn't and then after another back-and-forth you suggested I may have "inadvertently" stumbled upon the the real reason of your concerns: complexity, which I suppose you felt you were strongly hinting at, but I had explicitly mentioned earlier.
You will save yourself and others time by steelmanning and front-loading your priors - especially in written discussion forums like HN... Unless you're one of those people who enjoy debating more than learning other perspectives. This thread should not have been this deep when I have been stating "there are other factors" in my second contribution to it, and it turns out you were agreeing all along.
> You will save yourself and others time by steelmanning and front-loading your priors
This isn't what happened - my end of the conversation was a reaction to your replies and only your replies.
> This thread should not have been this deep when I have been stating "there are other factors" in my second contribution to it, and it turns out you were agreeing all along.
You did in the prior reply - at least explictly - only. Forgive me for not making assumptions of things you didn't say.
But again, my point was that if "protection of society" is a factor in this complex system, there's not much argument against maximizing that.
All that said ...
> complexity, which I suppose you felt you were strongly hinting at, but I had explicitly mentioned earlier.
This wasn't my conclusion, it was simply a reaction to getting more information in that reply than you had previously offered.
> Unless you're one of those people who enjoy debating more than learning other perspectives.
:(
Getting a reductive comment like this doesn't help.
> EDIT: Prison should still be about rehabilitation and treating humans humanely, to be clear.
No. Prison should be about punishment combined with rehabilitation, neither at the expense of the other.
It is perfectly OK to say that punishment, the infliction of pain, for a crime, is warranted even if it has no rehabilitative value, assuming that it is not demeaning or cruel.
Why? Several reasons:
1. Punishment has it's own value for the sake of justice. A hypothetical: Imagine there was a drug, with a 10% fatality rate, that perfectly rendered the receiver incapable of murder without any other side effects. They just perfectly gain control of their emotions and reason, or something to that effect. If a person goes and murders 50 individuals, but takes the drug and lives; they've been theoretically perfectly rehabilitated and need to be let back into society, right?
If you think, "of course not," you are now admitting that punishment has a value by itself.
EDIT: Also, this hypothetical, actually exists. Imagine this case with SBF. Imagine if the only penalty for his actions, were that he could not run a banking organization ever again, or hold more than $1,000,000 in any account that he controls. Perfectly rehabilitated, my hypothetical with the drug, in one swoop. He will never be able to commit this crime again.
I think I might very well run and do a financial fraud tomorrow. At least I'll enjoy the high life for several years. You are literally telling me, in that case, I could live for years, possibly decades (if I'm Madoff), and my only punishment will be that I can't do it again. After all, it's only about rehabilitation for myself; and to do otherwise would be punishment for punishment's sake.
2. If punishment is not given out fairly, and is only contingent upon rehabilitation; you are ignoring the rights and feelings of the victims and focusing too heavily on the rights and feelings of the criminal. Victims have feelings and rights, and considering they are the harmed, their feelings and rights ought to be first priority, and the criminal's second. Otherwise, victims feel the need to take things into their own hands. Always have, always will, as part of human nature. That's how you get societal meltdown, followed by vigilantism.
While there's some benefit (deterrence) to there being perceived costs to bad behaviour, it's arguable whether punishment for the sake of punishment stands up on its own merits.
In your proposed world, where murderousness is recognised as a treatable illness, it doesn't really seem reasonable to punish to punish or to imprison as a deterrent.
I'll kill your daughter, scatter her remains on the road, take the drug, and see if you think otherwise.
Think about it. Under this hypothetical (which I think is OK, everybody does Trolly Problems all the time), you should be just fine with this result. The deterrence value is there (10% chance of death), I've been rehabilitated permanently so I can be let out a week after I did the murder, it's all good. I might as well add some torture to the mix as well, because the drug will perfectly rehabilitate that too, of course, so it doesn't really matter how I did it either.
Some people are. Some people who have been victimized do forgive and ask for leniency.
There is an emotional and personal aspect to that, but typically we don't set laws that way.
I'd also argue that "it's all good" is not a fair measure for when we consider justice to be served. Practically, when there's nothing left to gain, the scale tips from justice to pure retribution.
> Some people are. Some people who have been victimized do forgive and ask for leniency.
I think you're confusing forgiveness with punishment. The two are not incompatible.
If your son hits your daughter, you forgive him immediately (you do not hold hatred or anger in your heart for that action); but you still punish him to deter the future behavior. The two are not incompatible, or at odds with one another. Similarly, it is not incompatible that a man who committed mass murder might be forgiven by the families (in that they won't hold hate in their hearts, or use his name as a curse), but the families may also simultaneously desire that the individual be removed from society.
> Practically, when there's nothing left to gain, the scale tips from justice to pure retribution.
Retribution is part of justice, and is not at odds with it. If I steal $500, I owe $500 as part of justice. If I steal $1,000; I owe $1,000 as part of justice. If I steal $10 billion dollars, a sum I shall never repay, I can only beg forgiveness and pay the most I reasonably can, for a reasonable amount of my life. For justice, at that point, recognizes that a society which allowed me to steal $10 billion in the first place, has some responsibility as well, reducing the required amount for retribution.
> I think you're confusing forgiveness with punishment. The two are not incompatible.
Not at all. You said "you should be fine with it," which is really "acceptance" rather than forgiveness, although they go hand in hand.
My point was simply that being fine with it or not being fine with it as an personal, emotional response typically does not guide modern societal rules.
> Retribution is part of justice, and is not at odds with it.
Inherently this is probably true, but we actually have laws that are intended to specifically exclude that as a factor, depending on jurisdiction.
The punishment so that the universe feels more fair to me isn't all that useful. Maybe as you suggest the mob lynchings in this case are unavoidable but I'm not convinced.
Happily (both for those who want to subjectively See Justice Done, and for those who upon reflection find it all a little perverse), the two don't really seem to be separable beyond a certain point.
It might work for you, but are you telling me that if you were the murderer in question, you wouldn't be afraid that the family wouldn't assassinate you at first opportunity if this happened to their daughter?
A heavy sentence is safety for the criminal as well.
That seems completely orthogonal to the point I disagreed with, which was (loosely, sorry) that punishment purely for punishment's sake is a social good.
Retribution shouldn't be the driving force, but I can understand it from a societal standpoint. Victims and the families of the victims will want to see a punishment applied for the harm they've suffered. It's in the state's interest to make sure that it's not excessively applied, but to degree there's a mix of correction and retribution that has to be taken into account at sentencing. One person's spite is another's justice.
I think that if too many people see retribution as no longer being applied, some people will start to take matters into their own hands to seek vengeance.
The state has an interest in preventing that and assuring retribution is applied as evenly as possible, and counterbalanced by other mitigating factors (e.g. the degree of offense, the circumstances under which it occurred, likelihood of reoffending, penitence of the guilty, etc.).
I find your points quite interesting. If I'm understanding correctly, that if the victims, families of victims, or frankly, anyone who feels pain and wants to seek retribution, don't believe that the retribution is sufficient, then they may take action into their own hands. I witnessed this living in Tanzania, where if people didn't trust the police to arrest and punish someone who stole, sometimes the people would track down and seek mob justice (violence?) against the person who stole.
So if the government would take a true rehabilitative approach, and maybe arrest people but treat them well, try to help them so they don't do the same behaviors in the future, a percentage of the population might see that as insufficient and take retribution into their own hands.
You've helped me realize why I've actually shifted my professional focus from wanting to change politics to wanting to change culture. Seems a lot of being in government is doing what the people want, and if the people want retribution, then the government has to follow it.
I hope for (and am working towards) a world in which we help people know our pain not by trying to cause the same pain to them, but by expressing our pain to them with more granularity, because the pain they'd feel as a result of retribution will never be the exact same pain we feel, as our contexts are way too complex to replicate exactly.
I really appreciate your comment, thank you for helping me think more deeply about this.
Yes, I think you've eloquently summarized my thinking on this. Thankfully I've never had to witness people trying to take justice into their own hands, as you have, though I imagine it must be harrowing to witness especially in a mob situation.
It sounds like you're trying to be part of the solution, which I deeply commend. Thank you also for your very thoughtful reply. It's appreciated.
One of the most "unstabalizing" things in a society is a person or people with nothing to lose. You could make an argument for much of government being reducing the number of people with nothing to lose.
I think both of those are flawed views. Not necessarily mistaken, but incomplete. One of the key reasons we imprison people is to prevent them from doing further harm to society: i.e., we put them in prison for our benefit, not theirs. It's definitely good if they're rehabilitated along the way, but rehabilitation isn't necessary for their imprisonment to be a net benefit to society.
I think it depends on how we define victim, and especially how direct and tangible the harm needs to be to be considered a victim.
But maybe it also has to do with whether people feel victimized. If no one felt victimized, would we punish?
So I imagine it's probably a combination of who feels victimized and who society believes should feel victimized. Because as others may respond, white-collar crime has people who get harmed as a result of the actions, even if it's not as obvious as the person directly punching them in the face.
One could argue that even the fact of breaking the law can harm those who went through great lengths to not break the law.
What SBF has done is not a victimless crime though: lots of fairly ordinary people lost money because of what he did, some of them lost everything.
Yes, I know some of the people who lost money are rich, and much is being made of that by people who want to troll by saying that's the only reason he really got into trouble (e.g., on Reddit). But that's not true: there are plenty of victims from SBFs crimes, both rich and not rich.
And in this kind of discussion I suggest it's helpful to avoid hypotheticals and to look at the real situations and outcomes relating to the case we're talking about.
What is a victimless crime? Speeding? Even though excessive speed is strongly correlated with crash deaths?
Fraud? The money comes from somewhere; someone is harmed by it (Pratchett's Going Postal has a good line on it - "No, You Have Not. But You Have Stolen, Embezzled, Defrauded And Swindled Without Discrimination, Mr Lipvig. You Have Ruined Businesses And Destroyed Jobs. When Banks Fail, It Is Seldom Bankers Who Starve. Your Actions Have Taken Money From Those Who Had Little Enough To Begin With. In A Myriad Small Ways You Have Hastened The Deaths Of Many. You Do Not Know Them. You Did Not See Them Bleed. But You Snatched Bread From Their Mouths And Tore Clothes From Their Backs. For Sport, Mr Lipvig. For Sport. For The Joy Of The Game.”
IMO an important component of punishment is convincing society that justice has been served. Too light a punishment, and vigilantism will become prevalent.
Your comment and another above has me thinking that it's almost like vicarious punishment. "If you don't punch them, I will, so you better punch them hard enough."
It makes sense. We empower the government to act on our behalf, including with violence. Arguably it is one of the fundamental reasons for government to exist.
And I wonder if certain calculations, like preventing vigilantism, tend to act on the behalf of not the majority of a population but an extreme few. Or in other words, if 95% of the population support an idea but 5% violently opposes it, does the government cater more to the 95% or 5%? At what point are government officials afraid that the 5% will commit violent acts against society or them and their loved ones and therefore cater to their perspective more than the majority?
I'll try to find the article, I think the point was that we think we are being violent to others with a conscious intention of trying to prevent future violence, but that most of the time we are doing it with the intention of them knowing our current pain that we think they caused to us, not really thinking much about the future.
So if the spite causes people to feel sufficiently afraid to do the action in the future, maybe it deters people from acting that way?
I wonder how the measure they measure the deterrence effect, it seems impossible to me. It would be a society-wide thing (hard to come up with an isolated experiment) and it seems like something where people would bring in a ton of bias.
Recidivism I think is a great one: direct experience of the traumas of imprisonment not only fail to address the root failures which lead to crime, it seems to exacerbate it! If direct experience fails to deter, I am unconfident proxy experience would see success either. It's a meme by now, but see Norway for something closer to the mark.
Recidivism was something I wondered about for a second, but I think it is not what we’re looking for. I think the theory of deterrence is specifically that punishing crimes harshly will make other members of society less willing to commit crimes. Recidivism is a failure of rehabilitation, not deterrence, right?
It also seems like the population of ex-criminals couldn’t be representative of the population as a whole, right?
(FWIW I think the theory of deterrence is probably not correct, I can’t prove a negative, but the burden of proof lies at the feet of people who suggesting it I think).
> (FWIW I think the theory of deterrence is probably not correct, I can’t prove a negative, but the burden of proof lies at the feet of people who suggesting it I think).
There are absolutely times that I do not speed because I am concerned about the consequences of getting caught.
There are absolutely students in the school where I teach who follow given rules not because they agree with them, but because they are deterred by consequences. They refrain from climbing the volleyball net not from moral agreement, but because it will get them in trouble.
It's better for people to not commit crimes because they agree on the morals and principles involved... but if people don't agree or have a moment of weakness, the consequences are still influential.
These are just anecdotes, which are fine for informal conversations like this, but hopefully you’d be a little more rigorous if you were seriously proposing a course of action for the justice system.
In the case of students, they seem to try and cheat sometimes, so the deterrence doesn’t seem very effective. Anyway, the negative consequence is very disperse (it hurts the reputation of the school if they get through without learning anything). The main bad result falls on them (they waste thousands of dollars to intentionally avoid learning). They also might fail the final, not as a punishment, but as a natural result of not learning the material.
In the case of speeding, everyone here speeds. The flow of traffic is always 5-10 over the speed limit here. People are intentionally breaking the posted speed limit to go the safer speed (going the speed limit here impedes the flow of traffic and makes a more dangerous situation for everyone). I think it is more of an informal decision making process—people just follow the herd—but it is a funny example!
Are you saying you are never influenced by consequences in choosing what to do?
I understand the magnitude of deterrence effects may be in question, or that the relative worth of different types of deterrence are open to debate. But I don't really understand how something that is nearly a universal human experience can be in question. Almost everyone has chosen not to do something because of the consequences of outside rules.
Indeed, we can easily try and see. If I fail to be visible during break duty (so that students think there are unlikely to be consequences), students will climb the volleyball net. :D
> going the speed limit here impedes the flow of traffic and makes a more dangerous situation for everyone).
This has been studied and is itself a silly (untrue) anecdote.
> Are you saying you are never influenced by consequences in choosing what to do?
Nope.
> I understand the magnitude of deterrence effects may be in question, or that the relative worth of different types of deterrence are open to debate.
In the context of the thread
> A good prison system should balance all four.
I thought it would be clear that the magnitude and the relative worth were the topic. Sorry if that wasn’t the case! I’m definitely not going to defend the idea that nobody has ever avoided doing something for fear of punishment (although I do think that in a well functioning society, most of the negative consequences should be natural, not artificially imposed as punishments).
> If I fail to be visible during break duty (so that students think there are unlikely to be consequences), students will climb the volleyball net. :D
I think if that’s the sort of thing you are worried about, you must be working with kids. They probably need a stricter treatment, since their brains aren’t done yet.
At some point its not about deterrent or social benefit but justice. People can say its not fair or productive for people like him to be locked up forever. Well, what about their victims? How many people's financial futures were destroyed by SBF? Is it fair to all those people that he will get to live a normal life? And likely a comfortable well off one at that. He already had a privileged family and I have no doubt it will be easy for him to profit off his story once he gets out. The hardly seems right.
> Well, what about their victims? How many people's financial futures were destroyed by SBF? Is it fair to all those people that he will get to live a normal life?
That sounds more like retribution than justice. I.E. wanting to cause him pain because he caused pain in others.
Of course, i don't have a better answer by any means.
It is deterrence: it sends the message of don't do the same thing or you'll wind up in prison for a long time. It really isn't retribution, this kind of enforcement is meant to scare other potential white collar criminals into not breaking the law as well.
It protects potential future victims - both from SBF and from those who might want to emulate him.
Which is why I think the sentence is too low.
There are other ways he could make reparations. One would be to have one-to-one meetings with his victims, where they tell him in person how his actions affected them.
There's a fair chance it would bounce right off SBF, because he clearly has serious personality issues.
So, legal theory provides three reasons for punishment:
1) revenge ("an eye for an eye") - that's not considered a factor anymore today except as an upside-limit on the punishment, ie, the punishment should not exceed the damage caused. Here, the damage caused was immense, so don't think that'll be a limiting factor.
2) specific prevention - keep that particular perpetrator off the streets, so they can't commit crimes again. There's some argument that old people commit fewer crimes, so when the perpetrator is old enough, one can let them go. Maybe one shouldn't let SBF out until he's older than Madoff was...
3) general prevention, aka deterrence - make sure that the punishment (in conjunction with the probability of being caught) is sufficient to discourage others from committing the crime. This is problematic as apparently most perpetrators seem to think that they won't be caught (which is why capital punishment doesn't necessarily reduce crime rates). I think in this case it's good that the many, many crypto "operators" see that there is some downside in scamming people.
Imo 5 means 3 and that is too low for most serious crimes, it feels almost like an incentive to just not get caught, more than an incentive to not do it all.
Losing 20 years of your life though will have a drastic effect on the rest of your life. As it should for some crimes.
Or is your argument we should skip from 10 to death, I'm honestly not sure.
My perception of some of these financial crimes - Madoff included - is they start off with a small slip, rather than a full dive into fraud. A lot of times it snowballs while the person responsible keeps searching for a way out.
I wonder at what point SBF would have even said what he was doing was immoral. If you're running a Ponzi scheme you think you can salvage, would you compare yourself to Madoff, or would you think "I'm trying to set things right"?
From what I read on Wikipedia, Madoff didn't make a single investment with the money given to his wealth management program. He deposited it all into a bank account and paid people out of the same bank account. This is notably different from SBF's case.
Rather, I'm suggesting that in the eye of the beholder, a very clear case of fraud might be self-perceived as a bump on the road to lawful, legitimate financial dealings.
So the question is if SBF didn't see himself as committing the same crimes as Madoff (even if he was), would Madoff's sentencing and fate even register as a potential deterrent?
We don't know to what extent prison is a deterrent. It's classic survivor bias - we only get to see the cases where the deterrent failed, not where it succeeded.
I guess the nuance is that SBF can get paroles if he behaved well. That is, this 25 years can be punitive, but he will also has a chance to earn some trust and reduce the punishment.
He can’t get parole, but can get RDAP, halfway house, first step act, good behavior (15%), in theory a rule 35b (not sure what he knows), and whatever else gets invented in the future. Maybe a commuted sentence but probably not for a while.
Probably out in 17 years which is still a long time.
I was most surprised by the recommendation of medium security. Not sure how well Sam will do in a medium.
There is a possible "good behavior" reduction, but the maximum of that works out to around 15% off the sentence. He'll serve at least 21 of those years or so.
The problem is, criminals think they will not be caught. There is a deterrent, but the difference between 10, 20 and 30 years is abstract for someone who thinks they are not caught.
The judge provided a good counterargument: if a thief burgles a bank, goes to Vegas and doubles his money and gives the original amount back to the bank, does that deserve punishment?
So he stole stuff in 2022 at a low point, and now his victims are going to be paid 30% the cost of what it would take to rebuy it? That's "repaid in full" in your mind? Losing 70% of their BTC?
not to be too unsympathetic but if those people he defrauded (which yes is a very bad thing) were all crypto degens gambling on things they knew they shouldnt be gambling on, does that change the calculus at all
The USA has an incredibly robust, tightly monitored and regulated financial market. The SEC, FDIC and associated regulators and auditors carefully control bank reserves, prosecute insider trading, prevent and insure against fraud.
Some people decided to opt-out of that system and send their money to an unregulated entity in the Bahamas to buy imaginary money without government oversight.
Honestly the government shouldn't have intervened here at all. The people who lost money should have been laughed at and told that's why you put your money in the regulated market. If you intentionally try to avoid taxes, anti-money laundering regulations, audits and securities law by buying crypto overseas, then taxpayer resources don't go bail you out.
I agree. However, I think there's something to be said about how people don't understand what kind of protections are afforded to them by regulation.
A lot of these people were likely acting in some level of good faith, assuming that a company so big it could afford a Super Bowl commercial starring Larry David would never scam them. I know, it's stupid, but people don't understand where the guardrails are, what FDIC insurance really is, what sort of insurance exists on retail brokerage accounts, etc. And they didn't just lose money off of crypto losing value, they lost beyond that amount off of this business co-mingling funds when they were not supposed to.
But I do not feel that badly for anyone whose life was 'ruined' over this for one big reason: they were trying to get rich quick. That's the fact that underpins so much investment in crypto. BTC to the moon! SHTC to the moon! ETCC to the moon! These people were hoping for their 'investments' (speculative gamblings) to explode in value. And they weren't planning on sharing any of it with you or me, not beyond what they're legally required to through taxes (and sometimes, not even that, like you say as well).
I'm not sure I fully agree that we should just sit by and let them be robbed, but the point you make about the government doing nothing is an interesting one as it would be great marketing against a disruptive currency.
If you ask to borrow $500 and I give it to you, and you run off with the money with no intent to ever pay me back, did you commit fraud? Or was I just a rube who should have known better?
You seem to wish to live in a zero trust world model where everyone is out to scam everyone at all times and "caveat emptor" if you do get scammed. We should do our best as a society to not turn into that.
I'm reading their comment as the opposite - there are mechanisms for a high trust society in place (which is good), but if you go out of your way to opt out of it then you're on your own.
The difference is there is no such thing as "unregulated" in the concept of fraud. Doing fraud is illegal. Even if FTX had done all the paperwork to be compliant, it would still be illegal fraud.
Same as there's no place where murder is allowed. You can't "opt out" of parts of society. It's not even "take it or leave it", society is "take it or get out of our reach"
Prisons are good for punishing criminals and keeping them off the street, but
prison sentences (particularly long sentences) are unlikely to deter future crime.
Prisons actually may have the opposite effect: Inmates learn more effective
crime strategies from each other, and time spent in prison may desensitize
many to the threat of future imprisonment.
See “Understanding the Relationship Between Sentencing and Deterrence” for
additional discussion on prison as an ineffective deterrent.
———
5. There is no proof that the death penalty deters criminals.
According to the National Academy of Sciences, “Research on the deterrent
effect of capital punishment is uninformative about whether capital punishment
increases, decreases, or has no effect on homicide rates.”
That is certainly correct for "street crime" where premeditation and risk reward analysis aren't a part of the equation.
I have some pretty serious doubts about it when it comes to large financial crimes where both those things are absolutely part of the process. A death sentence probably isn't going to stop someone from killing another person, they're already off the deep end of irrationality. However 25 years of prison is probably going to be a significant deterrent to someone choosing to commit billions worth of fraud, maybe the profit margin isn't that important.
Yeah, I really think comparing common street crime with high financial crime is Apples and Oranges. Common criminals don’t have much to lose, yes going to prison sucks, but it means less when you live in low income housing with other people, can’t afford basic shit and/or are in significant mental distress. On the other hand Financial criminals usually have a LOT to lose, and to get into the position to commit those crimes they likely have a degree of rationality that’s less guaranteed than in street crime.
Frankly, I think we need a lot more of this kind of punishment to get more trust back into our high-trust society. More rich people need to go to prison for crimes against society, because honestly it feels more like Madoff and SBF were one offs rather than business as usual.
Yes but at the same time, anyone attempting to set up legitimate crypto exchanges and engage in the kinds of shenanigans SBF indulged in will know to check with their lawyers before moving now, because they'll have to think "Will doing this (possibly fraudulent activity) land me in jail for 25 years like SBF?" - that's a decent deterrent.
I don’t know if I disagree, because I have not thought seriously about the risk/reward.
My point along with the grand parent is that at a certain point it is more costly than it is worth in deterrence. And the data backs that up, generally.
>5. There is no proof that the death penalty deters criminals. According to the National Academy of Sciences, “Research on the deterrent effect of capital punishment is uninformative about whether capital punishment increases, decreases, or has no effect on homicide rates.”
Capital punishment is cheap though. And more humane than life sentence. Actually I think that we should return some form of corporal punishment and shorten prison sentences for non violent crimes. Subject SBF to Singapore style caning every month and 2-3 years in prison, forbid him to ever work with other people's money and be done with him.
In terms of "ruins your life", anything past a few years does that.
Speaking purely for myself, I don't feel much difference in the deterrent effect from the punishment being 5 years or 25 years. Either one would utterly wreck everything about my life, and although the latter is worse it's not enough so to change my decisions.
If he gets out in 5 years he'll be doing the same thing. He showed no remorse or understanding that he did anything wrong. A 25 year sentence means we've got 20 more years of public safety.
I would easily go to jail for 8 years for $50+ million. 25 years would not be worth it to me for any amount.
I am from El Paso, which is on the border with Mexico and grew up with many kids whose parents were smugglers and cartel affiliated.
I know several parents who went to jail for ~10 years while were were in elementary school, the kids never wanted for anything, and then when the parents got out and started capital intensive business.
One parent did 12 years and got out to start a a series of high end mexican restaurants, one started a steakhouse, one bought a small hotel, one started a commercial construction company.
It's all part of the game, just how startup founders grind for years for the money.
Honestly? I sincerely doubt you, or anyone would actually, really, for realsies, go to prison for eight years for $50M. Anyone would beg to be released after a few weeks.
That is a complete middle class mindset. Jail is cool in the hood. I've done a few months for stupid stuff when I was young and it's not that bad.
People risk 10 years for robbing bands for a couple thousand. A guaranteed $10 million would have lines around the block for volunteers in the neighborhood I grew up in.
The main purpose of imprisoning white-collar crime is to act as a deterrent. If the upside for a financial crime is billions of dollars, and the potential risk is 25 years in prison, lots of people will be willing to take that risk, especially if 25 years actually means 17ish with good behavior.
If the punishment is life in prison with no chance of parole, it'll act as more of a deterrent.
Punishment lengths don't act as a deterrent to petty and violent crime, because the people commiting those crimes are not intelligent or are crimes of passion. Systematic fraud like this is slow, calculated and methodical.
In this case, could he be considered a violent economic threat to society? His defense did try to argue that he was not a "ruthless financial serial killer".
Most deep discussions require some amount of discussing your terms. A surprising amount of insight can be gathered by playing with and altering previous assumptions of a word's meaning.
For instance, by seeing violence as a spectrum you can see that while lying to the Nazi about the Jewish person in your attic is "committing violence" against said Nazi, you can also recognize that the lie is quite obviously justified violence -- and there is a spectrum of justified violence in that case.
When you lie to someone you damage their ability to see reality as it is, especially the reality of yourself (your thoughts, motivations, etc). Its not as severe as a punch to the face (in most cases at least) but it still causes harm.
At least if you are making statements going against the general understanding of the society you're in then make a reference to the ideas or theories that prompt you to make these statements.
Note: many forms of theft obviously involve violence.
Definitions vary depending on context. I think of violence as a spectrum. Talking peacefully and negotiating is extremely low violence. Threats etc are more. All our war and atomics are about the limit.
> Some definitions are somewhat broader, such as the World Health Organization's definition of violence as "the intentional use of physical force or power, threatened or actual, against oneself, another person, or against a group or community, which either results in or has a high likelihood of resulting in injury, death, psychological harm, maldevelopment, or deprivation."
Violence IMO is anything which causes harm or can be used to force a condition.
No, screaming at someone is not violence. The WHO definition you cite also restricts its definition to physical force. If screaming were violence, we'd have prisons full of sports fans after every football game.
"Harming someone" is anything which causes harm. We have different words to describe different things. In this way, we can tell them apart when communicating with each other.
Not all violence is wrong or illegal, and not all screaming is violence.
Words are defined by people. By seeing violence as a spectrum you can see the spectrum of possible responses to violence. We can then distinguish the different forms of violence with other words, like "physical"
It is ridiculous that finance owns such an outsized position in our economy, with the wizards of finance hailed for their key role in the efficient performance of the economy rewarded to the tune of megabillionaires...
and people will say with a straight face that defrauding large numbers of people of their money might not have numerous health / fatal consequences: anxiety, stress, divorce, loss of benefits, working longer past retirement.
It's like saying Mafia bosses or Hitler or Stalin weren't violent and dangerous because they ordered the deaths of millions with a stroke of a pen.
"But financial cons are VICTIMLESS CRIMES! Give the guy a slap on the wrist and let him clean someone else's life's savings again! They may or may not kill themselves. VICTIMLESS!"
I don't know. The appropriateness of the sentence is not something I feel super strongly about one way or the other, but 25 years is objectively a very long time. Think about what a typical person does in their first 25 years. That's long enough for a person to be born, go through early childhood, go through all of their basic schooling, attend college, get a job and work for 5 years, and have a kid of their own. Or, think about a 25 year old person, and put them next to a 50 year old person. Or a 50 year old person next to a 75 year old person. It's just a very long amount of time, no matter how you slice it.
Best teacher I had in high school taught economics. First day of class his lesson was "If you're going to become a criminal follow these 10 rules".
I can't remember all the rules but the two I do:
1. Don't do anything for less than $1M. Risk isn't worth the reward.
2. Don't use a weapon. It adds years to your sentence.
It was mostly about how white-collar crime has a much safer risk/reward ratio.
How you commit crime is make it complicated enough that a prosecutor will think twice about their ability to teach a jury about how what you did worked and that any of the steps were even wrong in the first place. This is why so much financial crime goes unpunished.
Yes. He's been made an example of. That's kind of the point: "Tempted to commit fraud on a huge scale and wreck thousands of lives? Consider what we did to this guy."
On a much more severe scale, this is clearly the message that the Kremlin lavishly displayed of the initial treatment of the suspects involved in the Moscow Crocus Hall shootings/bombing - the results of severe torture send an unmistakable message of "Do not be tempted to try this (terrorism/attempted revolution" to the citizenry, with the implicit message that their very-short remaining lifespan will be very painful.
"Do not be tempted to try this (terrorism/attempted revolution" to the citizenry
And the citizenry are the only ones left who can be deterred by this message. Islamic State will switch to using suicide bombers who have no fear of torture.
My personal theory is that Prigozhin's aborted mutiny last year and Ukraine's sustained drone campaign against Russian oil infrastructure paved the way to the Crocus Hall attack. Now the doors have been opened and Russia's internal security has been revealed for the paper tiger that it is. Every single paramilitary group with a bone to pick with Russia has now been forcefully made aware of Putin's weakness and now they'll be lining up to copy these attacks. All the while, he continues to try to blame Ukraine for this despite all evidence to the contrary. Scary times to be living in Russia right now!
For me, SBF's fraud is a comorbidity but not likely the underlying cause of the suicides. By similar logic, should we imprison all tobacco executives?
Personally, I'm glad SBF is being held accountable but this sentence seems very harsh, especially given that I expect all of his coconspirators will mostly be let off the hook.
Maybe don't send your money to an unregulated startup in the Bahamas to gamble on cryptocurrencies if losing that money is going to cause you to commit suicide?
The "victims" knew they were intentionally avoiding government oversight of securities law, banking regulators, etc. When they lost money we should have collectively shrugged our shoulders and said that's the risk they chose to take.
It sounds callous, but if accept the suggestion that he's responsible for their deaths, how can we then excuse people working in the casinos or other gambling ventures that surely lead to the deaths of many.
Or would folks here suggest the numerous HN contributors who have worked in gambling tech are deserving of life in prison as well?
Gambling, like finance, has rules. If I start a casino, and tell everyone that the roulette is fair, and then go ahead and rig it so no one ever wins, then yea, I should be sent straight to prison.
If SBF told everyone loud and clear "hey guys you can give me money and I will use it to gamble on my favorite crypto tokens and play board games with Caroline" then I don't think he would deserve a prison sentence (but he also wouldn't get any customers). It's the deception that makes it a crime.
Maybe that girl shouldn't have worn that skirt, maybe that black guy shouldn't have been in that town after sunset, maybe that guy shouldn't have had a boyfriend.
There was a trial and now a sentencing, your argument according to law is wrong.
As far as I am concerned, when you steal from me, you robbed me of piece of my life. The time I spend earning that money, instead of being with friends or just pursuing a hobby or just wasting it on HN.
How many lifetimes worth of time were destroyed by his fraud.
I mean... At the end of the day everyone 'invested' their money here. The risks of high interest Bitcoin accounts were well known and elucidated by all reputable sources. If you lost money in this, I'm truly sorry, but realistically what did you expect. It wasn't even a bank (and remember if your bank loses money, no one's going to jail as long as they followed regulations).
> A sentence of 25 years completely destroys his life.
No, it does not "destroy his life". He will be in his early/mid-50's when gets out. Someone with his privilege, education and resources should have known better. It's hard to feel sympathy. I expect that sufficient punishment in cases like this will serve as a deterrent for others like SBF who would do the same.
Hopefully he is ALSO restricted, for life, from ever working in finance again.
>Hopefully he is ALSO restricted, for life, from ever working in finance again.
A felony conviction is pretty effective for heavily restricting any type of employment. The universal and cheap access to background checks means work is either places that deliberately have "hire a felon" programs or some type of self-employment, or connections with people very high up in a company. Though all those angles are also complicated if any sort of state licensing is involved.
That doesn't actually seem to be the case for white collar criminals though. That guy from Wolf of Wall street is conning people to this very day, including being a hype guy for crypto scams!
I don't know for sure, but "hype guy" probably means self-employed and companies pay his company for that sort of thing. That is available for blue-collar felons also.
I think it seems low because of the magnitude of the crime. Also because we punish more violent crimes with very harsh sentences including charging non-violent perpetrators with violent crimes(Felony Murder).
Add in the desire to be seen as doing something with sentencing inflation and your get multiple hundred year sentences.
At first I felt that 25 years was short but thinking about it, he will be ~60 when he gets out... so maybe not too short.
I don't think we should pressure people into admitting guilt, but cooperating could be important. What more should he have done to help the people affected by his fraud?
I agree we should not pressure it but if you are guilty and caught with your hand in the cookie jar, it could be your best option. A good attorney will advise you if your best course is to minimize the damage by accepting a plea deal.
Madoff spent ~12 years in prison before he died at 82.
They gave him a 150 year sentence for a crime on par-ish with SBF's crimes, because at 70 there is little difference between 20 years and 100 years, so you may as well go for the shock value.
SBF is 32 years old. If (and it's a big if) he serves the entire 25 years, he will be 57 when he is free again. They are taking the best years of his life, and one day when he dies, having been imprisoned will be the defining event of his life - not being rich or being a CEO.
He may never marry, never have children, and will experience a very different (and far worse) life than most of the population. I have very little sympathy for the man, and I know draconian punishment is fashionable and cathartic, but I personally think this is a very suitable punishment for the very severe crime he committed.
He was playing fast and loose with clients' money (and ultimately made profitable investments). Elizabeth Holmes played fast and loose with medical testing and people's very lives. She got less than half this sentence.
His parents who are professors of legal ethics? His mother is getting a long-term lesson in the theories of consequentialism that she is a supporter of.
I think intent matters. I don't like what he did but I am convinced he didn't think he was doing something deceitful. Whereas Madoff had a guilty conscience and precisely crafted something intended to deceive.
Quite a short sentence for the magnitude of the crime. Financial crimes like these do kill people and destroy countless lives. They deserve maximum pentalties.
If it is to harm him and make the rest of the world satisfied with it 25 years behind bars seems enough to me, I don’t care if it is 25, 35 or 155. In five years I will have forgotten about this.
If it is stopping others, same thing, I don’t think that if someone is determined to do something similar would care about 25 or more years.
It will also give the enablers of criminality pause. If the mastermind gets 20-25, they'll realize they are risking 2-5 year sentences with zero upside just for "following orders" or negligently turning a blind eye to malfeasance.
Just a quick reminder to any potential felons in finance/crypto/corporate settings. If you decide to rob billions from the public, we'll let you out in about a decade as long as you don't beat someone up in prison. Just make sure you hide your money well!
I think of it like this: Many people would "happily" spend 5 years in prison for a more than probable chance to get filthy rich. That's a superset with, I imagine, significantly greater cardinality than the set of those willing to spend 25.
Obviously there is a sweet spot. For example, if you're okay with 60 years, than you're probably okay with 80. I'd imagine 20, give or take 5 years or so, is near that sweet spot, but that's just my gut feeling. Obviously statistics is key here, if there is any.
I think its probably taking the approximately 21 years you get with the sentence with maximum good conduct time reduction, and also assuming credit for time served after his bail was revoked.
That is a big difference. You can live a pretty good 15 or so years if you get out at 60. Considering that his parents are well off he will inherit some.
Milken got a sentence reduction for cooperation with prosecutors against others. The other big fish in FTX already cooperated against SBF, who do you expect him to roll over on?
This is not correct. Federal sentences do not have parole and can be reduced by a maximum of only 15%, meaning (if that happens) SBF will serve at least 21 years and be 53 when released.
Milken was released because Trump pardoned him, which I don't think says anything about how sentencing guidelines do or should work.
He was released after a sentence reduction for cooperation with prosecutors against others decades before the pardon. Both the release and pardon occurred, but the latter was not the reason for the former.
> prison should fundamentally be abt rehabilitation
You can’t ignore retribution and incapacitation. Focus solely on rehabilitation and people will take the law into their own hands while raging against the system when it comes to recividism.
We need to focus more on rehabilitation and restoration. But those can’t be exclusive of the other components of justice.
How long do you think it takes to rehabilitate someone so disconnected from reality and empathy as SBF?
Honestly I think that would take LONGER than 50 years...
I think 25 is on the high end of a reasonable sentence. White collar crime in the US has been a slap on the wrist (if anything!) since Enron. It's time we fix that. People need to see personal consequences for such anti-social and destructive behavior. If you are a CEO, you should be afraid of profiting from the suffering of others.
I sincerely wish every centralized exchange had their own SBF to burn them down. The negative impact of "investors" has been terrible for crypto. They've turned what should have been a trustless medium into a caricature of traditional banking with all of its downsides and none of the benefits. Whats the point of computing all the hashes if you end up handing your coins to some guy who pinky promises to pay them back at some point in the future with interest?
Without centralized exchanges, do you think crypto would ever really have become a thing? I like to think it would, and that we don't need exchanges, because I too have a strong dislike for exchanges (if not a hatred), but I'm a fairly technical user and even for me it's not exactly easy to be deep into crypto without exchanges. Particularly when it comes to exchanging dollars for coins.
In (my preferable) alternative universe, there would have been no speculation and to buy crypto you would have to buy in smaller amounts in cash or at local shops. It would have displaced PayPal and been used primarily for e-commerce and local small dollar value transactions to allow small businesses to escape ACH fees. The largest movers would have been international travelers and migrant workers.
Good point, although can an exchange really exist that is decentralized? What would that look like? Basically just a neutral broker between two individuals? That is a very interesting idea
A decentralized exchange is called a DEX and there are a lot of them. The biggest one is UniSwap as far as I know. They operate via the blockchain's smart contract system. Unfortunately there's no way for them to handle exchanges with offline assets and currencies so I don't think they can exist in a world without CEX.
Yes anyone with bitcoin can "exchange" bitcoin directly, but when most people say "exchange" they mean some sort of trusted third party that executes and coordinates trades on somebody's behalf. With most crypto currencies there are significant risk and trust issues when going directly unless you trust the other party. It can also be very difficult to find somebody who wants to buy or sell the amount of coin that you are looking to buy/sell, so there's considerable utility in the match making.
Actually, I wish we could burn down the IRS instead. I have to pay $1 of taxes to the US government for every $1 of Bitcoin I want to spend, because when I pull it out of my Bitcoin wallet (hardware, software, exchange, it doesn't matter) they consider it a "taxable event" and I have to pay taxes according to it's USD value, which ultimately makes its ecosystem still tied to USD, and makes me reluctant to spend crypto because of the taxation. Total bullshit. I'm just spending a currency.
Singapore doesn't tax this, you can spend crypto and transact crypto and none of that is taxable.
> I have to pay $1 of taxes to the US government for every $1 of Bitcoin I want to spend
AIUI, if the basis price of your Bitcoin was $0 and your marginal income tax rate was 50% and it was a short-term gain, that would be correct, but:
(1) Your basis value shouldn't usually be 0 or close to it,
(2) Where (1) does not hold, because you got Bitcoin when the price was near 0, it should usually be a long-term gain, on which you pay the lower LTCG rate, and
(3) The top marginal income tax rate that you would have to pay to the US government is well below 50% to start with.
> Singapore doesn't tax this, you can spend crypto and transact crypto and none of that is taxable.
Singapore is, then, tax subsidizing crypto speculation, which seems like a phenomenally bad policy (but orobably sustainable, as long as the crowd that can afford to engage in it locally is small enough that the effective subsidy can be absorbed), but, I mean, you should absolutely feel free to emigrate to Singapore if they’ll let you if this is important to you.
I really don't understand the severity of criminal justice system punishment. SBF got sentenced to 25 years for a white collar financial crime while a guy in my hometown hit and killed 2 people, while DUI and ran over 100mph on a local street with 35mph limit got 26 months sentence forb2 vehicular homicide.
Vehicular deaths are almost always under prosecuted in the US.
This does not mean that it should be legal to defraud people of billions of dollars, ruin countless lives, and harm many more.
This is a rare case where a white collar crime was appropriately punished. Sam showed no remorse, and no evidence that he would not engage in similar crimes in the future. He earned this time.
Hopefully he’ll reform and be worthy of early release; but candidly I doubt it. I think he’s irredeemable.
The money he stole and defrauded is lifetimes worth. Lifetimes of economics stolen from people. Lifetimes of stresses caused on people because of what he stole. How many people may have ended their lives because they lost everything? How many silenced voices are there in pain because of his fraud?
White collar criminals can and should be likened to serial killers in the severity of their crimes. They spread invisible miseries indiscriminately, near entirely without justice or recognition. I am glad one of them is finally being properly punished.
Motor crimes are punished leniently because almost everyone drives, and every driver can imagine themselves making a mistake behind the wheel and they don't want that mistake to ruin their life or the lives of their loved ones.
I'm not saying it's right. But it's the tacit consensus we maintain to make ourselves comfortable with the risks of piloting deadly machines every day.
I don't know if it can summarize books correctly always, it almost always does; and I also don't know if there's just a bias in publishing about race relations because that sells.
But it seems right to me that the most orthodox opinion is that racial bias, drug policy and socioeconomic status are the biggest factors in the severity of sentencing in general.
So you are referencing two acutely exceptional cases - a white collar crime by a rich person that only somewhat interacts with drug abuse of Aderrall that is acutely severely punished, and a drug-related crime that is acutely poorly punished.
Not that this holds up to scrutiny, and there are certainly issues with fungibility of lives and money, but let's say the value of a life in the US is $10 million. $10 billion in fraud is 1,000 lives claimed. The sentence could have been worse.
SBF operated with forethought and malice. He intended to deceive people. He was trying to commit fraud.
Hometown guy did not intend to crash or kill anybody.
Now the results of hometown guy's actions were more direct and severe, but had he had the choice, he would not have crashed and killed anybody. He's not a criminal, just a fucking idiot.
Yeah I don’t buy it. I suspect most DUI cases were conscious decisions made while sober. You don’t accidentally drive to a bar. You go there with plans to drink knowing full well you plan to drive back drunk.
If you go out to drink, you don’t bring your car. If you know you need to drive later, you don’t drink.
They might be drunk when they are driving, but they very much put themselves into a situation where it was the likely outcome while sober.
You think he woke up that day and said to himself, "Today, I'm going to get drunk, drive my car, speed, crash, and kill two people."
No. He did not. Everything that happened was likely unplanned. Hence, no forethought. And I doubt he was trying to hit anybody. Hence, no malice.
Yes, he still made those choices and they were bad choices. So he does need to make restitution. But the fact that he wasn't intentionally trying to do what he did makes his offense different than SBF's.
Now, is there an issue that our penal system is ultimately more punitive than rehabilitory? Of course, but even from a punitive standpoint, accidental murder should warrant less punishment than intentional large-scale multi-billion dollar fraud. We can't base punishments solely on the outcome of an event. Intent of the perpetrator has to matter.
White-collar criminals doing fed time are serving "easier" time than those in state prisons.
That said, I've personally known of two people who were convicted of DWI vehicular manslaughter, and they both received 15-year sentences, so 26 months seems to be an aberration.
Reposting one of my comments that wasn't particularly liked when i originally submitted it but i think becomes more relevant now.
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I find such white-collar crimes very interesting because of the math between crime and punishment.
For the crime that SBF is alleged to have committed, we can reasonably expect 20 yrs (he will be out in 10-12). But if he had committed a murder, he would be in prison for life (no parole).
Mathematically speaking, this implies that a life is worth more than fraud worth 8 billion dollars. We can make a very reasonable assumption that the govt can save 1 additional life using a million dollars (giving necessary treatment to drug addicts / suicidal people / etc). Out of the 8 billion dollars from SBF, government would have got at least 50 million dollars from taxes (this is a lower bound). Out of that 50 million, maybe the govt puts 10-20 million back for public good. So the govt could have saved at least 10-20 people from the money that SBF is alleged to have defrauded.
Based on the above, can we say that SBF indirectly killed 10-20 people? What would be the punishment for someone who kills 10-20 people? Surely more than 20 years.
This balance between the scale of crime and the severity of punishment can be very interesting. Should someone defrauding 2 billion dollars suffer twice the punishment of someone defrauding 1 billion dollars? What about 2 murders to 1 murder? What about numbers on scale that can change an economy (what SBF did)?
More fundamentally, is our legal system scalable?
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The point of the punishment is to tell you how much we don’t want you to do it. You get life for murder because we really don’t want people killing people. Fleecing them out of money is bad, but we can (literally) print more of it. Once someone is dead we can’t bring them back.
Your analysis is flawed because you’re looking at the problem from the vantage of collective outcomes. A murderer is one person who is making a decision to take an action that can end one or many lives. You want them to weigh that heavily as an absolute cost (I will go to prison forever if caught) not some relative cost (well if I just murder a little then I’ll only get a little punishment).
> Fleecing them out of money is bad, but we can (literally) print more of it. Once someone is dead we can’t bring them back.
The math of my argument was that with money, you can save lives, i.e., prevent people from dying. I don't believe the govt can print as much as it likes without hurting the economy (and thus people) in some other way.
The core of my argument is that defrauding billions of dollars causes deaths of dozens of people indirectly. Is that better than directly causing a death? I am not accussing anyone; just asking what I think is an interesting question.
I've seen people in the cryptography space use airquotes when referring to cryptocurrency to show their contempt for what they see as a scammy riff on their very serious and important work.
Before the Bitcoin et al. scamming, some people said "crypto" to abbreviate terms like cryptography and cryptographic protocol. Scammer bros appropriated "crypto", and made it dirty.
Also of note is since this is a federal conviction there is no parole in that system, and so unless SBF is successful in his appeal, he will spend at least 255 months in prison, that’s a 15% reduction versus the total sentence in return for good behavior while serving his sentence.
High, generally. The US has the highest incarceration rate in the world, and US sentences are an outlier in terms of how long they are (they’re not the longest, but the whole picture is kind of shocking).
I get your point, the claim was incorrect. But if you're only beaten by Salvador, Cuba, Rwanda, Turkmenistan, and American Samoa... Well, maybe the overall point stands: "Highest in the world" is hyperbole, that much is true, but the USA has an insanely high rate of incarceration, higher than most countries, and definitely higher than all "developed" countries. As a point of comparison, the next OECD member on that list is Turkey, which has about 34% fewer prisoners per 100k people than the USA.
Assuming the accuracy of that source on the numbers, its actually the 5th.
Yes, the United States is the sixth listed, but the 5th listed is part of the United States, not a separate country. (So are several others, but I don't think Guam or the US Virgin Islands are big enough that they move the US overall rating down far enough to matter.)
A difference in philosophy on prison sentence length. The higher incarceration rate is almost 100% explained by sentences that are on average roughly twice what the UK imposes (as one example).
People also commit suicide if the bank repossesses their home, their spouse has an affair, their surgeon makes an error, etc.
I’m not saying that SBF has no culpability, but I don’t think you should get prison time for causing someone’s suicide, or at least society doesn’t act as if it’s in any way equivalent to murder.
The scale of SBF's fraud was so enormous that the money could have been used to save hundreds of lives that have now perished. So if we use a little bit of EA napkin math, we can conclude SBF's crimes were on par to hundreds of murders.
The victims are going to get paid back (in 2022 crypto prices) due to the appreciation of FTX’s assets (crypto and Anthropic shares). So if someone lost a bitcoin when FTX collapsed (BTC was at $18k at the time) they will get more than $18k but not $70k which is today’s price.
If you wanted those kinds of banking protections, then you should have used a currency system that has those protections. Bitcoin is "easy" because it is unregulated, but the flip side of that is that you the consumer get no protection, and you shouldn't expect any.
This is pretty twisted. FTX can claim it made customers whole by benefiting from exactly the speculative gains that it prevented its customers from getting.
It’s certainly immoral but it’s the risk you take investing in an unregulated market. There are regulations to prevent exactly this when you invest in stocks or put your US dollars into a bank account.
That has zero to do with SBF's intention and should not be in any way a defense against the wrong perpetrated against them.
It could easily have crashed.
That it went in a direction that helps make his victims more whole is entirely happenstance and SBF should get ZERO credit or recognition for this aspect of restitution.
They've never made any sense to me, but neither do my country's sentence lengths. Ours seem too light, whereas the US's seem extreme.
I guess I'm really not sure what value there is to locking up someone like this for 25 years when in a sane system/society there should be far better options.
Those same people have effortlessly pivoted to saying that 25 years is a slap on the wrist (I'd like to see them stay locked in a prison for 25 years to demonstrate they actually believe this).
...and enough people pointing that out, and making it clear that they are outraged by the possibility of that happening, makes it harder to get away with him avoiding prosecution because of his political ties.
This is likely an example of free speech and free press working to overcome corruption to achieve justice.
I think we can look at SBF's political ties and make a reasonable guess at how likely it was that there were people trying to get him a deal with minimal jail time. You don't need specific evidence of that to say it was likely happening; the outcome is obvious evidence that if that was happening, the attempts failed.
Not sure why you are bringing up Bitcoin; SBF's business didn't have much to do with Bitcoin, beyond it being one of many methods used to deposit and withdraw funds.
The difference between opinions in this thread is interesting.
I think it's mainly because some see a punishment as revenge and others as correction.
But, as user publius_0xf3 is showing, revenge does not work. The victims don't get their money back.
If this sentence is used as correction I also think it does not work. Would such a correction really take 25 years? His life is over. I don't see how such a long time is helpful to him, to his victims and to society.
I wish society would stop viewing punishment as a tool for the greater good, whether as revenge or as something that will "correct" the criminal.
Treating it as a correction feels like a lie that polite society tells itself in order to absolve itself of the distaste of knowingly harming someone. We shouldn't pretend we can "re-educate" anyone. We can merely provide opportunities for self improvement, but we can't actively "correct" them.
On the other hand, treating punishment as revenge is unhealthy too. It's too easy to get carried away and it's even easier to get carried away by perverse incentives (gestures broadly at US incarceration rates). Two wrongs don't make a right, as they say.
So then how should society decide what punishment is fair? I believe the punishment should be as harsh as an elected judge feels is necessary for the perpetrator to think, "it wasn't worth this"—and not a bit more.
Isn't that using punishment as a deterrent? It's easy to see it that way, but no. That would make punishment impersonal again— unbinding it from the specific person, place, and circumstance that we should elect judges to consider carefully and compassionately. In other words, when one says, "the perpetrator should be punished {this much} to deter the others", then the perpetrator becomes a pawn, not a person.
All that leads me to believe that: the purpose of a punishment should be to inflict a harm equal to the perceived personal benefit of the perpetrator's crime, as an enforcement action of the social contract between the perpetrator and society.
Isn't there tons of evidence that this simply doesn't work?
I mean, I don't know this SBF guy, but do you think he thought there would be no punishment if he got caught stealing 8 billion dollars? I think his plan was not to get caught.
He was judged before a jury of his peers and found wanting. It's not revenge, it's being held accountable for his actions. Some crimes, like murder, can't just be "corrected". The solution we've landed on as a society is for there to be a punitive cost to be paid by the responsible individual. In this case, it's jail time.
SBF caused an incredible amount of irreparable harm with his actions, which almost certainly has resulted in suicides. He deserves this punishment.
The judge can take into consideration during sentencing conduct not explicitly charged. Heck they can take into consideration things you have been acquitted over by a jury too.
That is right (I'm telling you how the law is, not how it should be) A jury can decide that it was not proven beyond a reasonable doubt that you did something and yet you can still receiver a heavier sentence for it. (as long as they don't acquit you over all charges.)
>The 31-year-old physics graduate and former boy scout was handed five sentences: one for 20 years, one for 15 years, one for five and two for life.
I can't find the actual court documents, but I personally find a report from someone presumably at the trial more trustworthy than a government press release.
In most jurisdictions, though, you do. Attempted murder does not get the same punishment that murder does. Though I agree with the premise that it should get substantially similar punishment. Successful murder should get a bit more due to the consequences.
"Wow jeez! 'Only' ten years! That's not so bad, I think I could live with that, now I think I'm gonna go pull a huge scam! But damn, if he would have got 20 or 25 years, then I'd have to reconsider my carefully thought out decision to commit fraud" -- Nobody, Ever.
To most people, just the act of losing everything you have, losing your ability to provide for your family or yourself. Losing your reputation, your career and future career opportunities, is enough to deter them. Whether a crime will give you 10 years or 20 years, most people consider that to be so long, that it's more or less all the same. It feels like an eternity, and it feels like your life is over. So if they are going to take a risk, or make a stupid decision, then they are going to do it regardless. Not because they accept the risk, but because nobody ever believes they are ever going to get caught. They consider that as "my life is over anyway". And usually, it is. That's not the point of prison. If you are ever going to let people out, why not focus on making sure they don't come back. Punishing people by throwing them in cages with worse people, absolutely does not work. (note: I am speaking mostly about non-violent crimes, which make up 72% of the federal system)
> Disgraced Frank founder Charlie Javice has joined the likes of Elizabeth Holmes and Sam Bankman-Fried on a growing list of founders to be lavished with honors by the financial news outlet Forbes – only to later face criminal fraud charges.
> “The Forbes 30 Under 30 have collectively raised $5.3B in funding,” tech investor Chris Bakke tweeted on Tuesday. “The Forbes 30 Under 30 have also been arrested for frauds and scams worth over $18.5B. Incredible track record.”
>Judge Lewis Kaplan, just before announcing Bankman-Fried's 25-year sentence, said there was a risk "that this man will be in a position to do something very bad in the future, and it's not a trivial risk."
I call bullshit. Typical punitive justice reasoning. He might had done fraud, but it's hardly a risk that he "will be in a position to do something very bad in the future".
A lot of people confuse cynicism with wisdom, and that sets people up to be susceptible to bigger problems. For example, if you believe the legal system is corrupt and dysfunctional, it’s very easy to passively tune out and not support reform efforts because you think they’re pointless.
We see this a lot in politics where accusations of corruption are used to conflate people who are orders of magnitude apart – a good example of that are the recent classified documents investigations where some faux-sophisticates tried the “both sides do it!” excuse without recognizing the difference between immediate compliance and protracted resistance on contrived grounds.
The point is not that people were wrong but they were wrong because they had knee-jerk, lazy takes that should be disparaged.
I also know that the some of the people making these kind of takes have already pivoted to another knee-jerk, lazy take along the lines of "well, he ripped off rich people".
I'd actually appreciate it if anybody who made the original statements about Democrats not prosecuting SBF would come on and admit they were wrong.
It is absolutely worth remembering that much of the commentary on this site is written by some of the most gullible people on the planet. Aside from SBF-Biden conspiracy fans you also have your anti-vax guys, your climate denial guys, suckers for the latest superconductor scam, people who are still falling for a giant astroturf campaign by the fission industry, blockchain believers, and much much more.
A friend of mine got roughly half this sentence (12 years) for possession of cocaine with intent to sell. To be fair, was a large amount of cocaine and she 100% intended to sell it. However, she lost 10 years of her life (after good behavior) for being in possession of a < $1m worth of a regulated substance. Not sure how that fits on the spectrum against stealing $8b, but it all seems pretty disproportionate to me.
Why do you think that? From everything I've read, they had no idea what was going on, they just put their names on things because their son asked them to. If anything their crime was not being inquisitive enough to ask why.
"commit a violent crime with a silencer on your pistol" is an odd way of saying murdering someone.
There is quite a difference between murdering someone, and stealing a bunch of peoples money to the justice system. I am not saying that makes sense, but it's really hard to judge a crime when the year count starts getting into 10+ years. Would you be happy if it is 5x lifetime? Or some other silly number that means nothing?
How much do you think an extra 5 years would add in terms of deterrence? It seems downright dishonest to characterize a third of his life as a joke.
Where I would put my energy into is making the risk of being prosecuted higher. If getting prosecuted is rare, the kind of people who are into cryptocurrency are going to figure that they’re likely to get away with it as long as they aren’t so blatant. White collar crime prevention needs to focus on changing that assumption.
The smaller players already avoid America like the plague and their avoidance is only increasing due to a zealous SEC decreasing the likelihood of successful prosecutions. Big cases make the biggest difference because diplomatic pressure can be applied, which is why it's a shame that the US flexed on the Bahamas like they did for a case that only gets 25 years.
> How much do you think an extra 5 years would add in terms of deterrence?
Your parent post isn’t arguing for SBF to get 30 years, but pointing out how a large crime which affected at least hundreds of thousands and drove people to suicide gets a lower sentence than a violent crime which affects one person.
I have no idea if that’s true in the US, just trying to clarify the point.
This type of punishment is actually pretty terrible for all parties.
I could easily see a different, harsher, but more fair punishment...
1. All assets are sold off to pay victims
2. Prison for a few years. 5?
3. can only work jobs where nobody reports to them (no management, C levels, etc). Also cannot make companies.
4. Cannot own more than 2 properties, one of which is his place of residence.
5. Cannot rent out any property.
6. 25% of what he makes goes into restitution for the rest of his life.
7. Investments into any wealth instrument is to be confiscated, with exception to a 401k.
Basically, this person cannot be trusted with making money other than by working for someone else. This still allows him to make a life, but severely limits the similar path he used to defraud people.
Sending this guy to prison for 25 years is a waste for everyone involved.
True. But americans love to waste their tax money and put harmless (in a physical violence sense) people like him behind bars instead of doing something useful for society. In 10 years he'll be free and start the next scam with the couple of millions he's probably hiding somewhere.
> still allows him to make a life, but severely limits the similar path he used to defraud people
Do you remember the trial? The man can’t follow rules. You would be wasting the court every microsecond because Sam decides he doesn’t understand what two properties or renting technically means.
He's well-connected within the easiest industry ever to launder money in. Realistically, after the 5 years he'd get a job consulting for a buddy at the heart of some other cryptocurrency exchange, and from that position he would find a lot of scummy ways to make sidemoney under the table, none of which would go to his victims, since it would all be hidden. He doesn't need to have his own direct reports if he has the ear of someone else who does.
Even if he does everything above-board, the absolute most he could expect to make legally from a job that's not a grift and has no direct reports would be ~500K/yr. Over 60 years, that would mean his victims get back $30,000,000, or about 0.3% of what he stole.
>Sending this guy to prison for 25 years is a waste for everyone involved.
Agreed. 10 years is pretty much a life sentence already; who is the same person that they were a decade ago? Sentences beyond 10 years are not instructive but punitive and sadistic: if you're putting people in cages for that long then justice would be better served to banish. International waters? Make an interior Australia on federal lands over a few States: walled off with full security entry/exit points?
Not only is taking so many years equivalent to partial death, without the normalcies prison strips from its victims (yes America's prisoners are victims like the Brit's victims of hang-em for everything were still victims) it effectively kills off the family lines of these people because only a few states have conjugal visits. Most prisoners in the US are in enforced inceldom. If you argue crime is genetic and it's a good thing they are prevented from reproducing, then you just contravened civils rights arguments against that.
As bad as the American ones are, Japan treats you worse. I got to hear my internet friend and troll JS on voice chat after Japan let him out of jail, what he said completely disabused me of any interest in visiting that place. It's soft torture not by exposure to appaling conditions (US), but by excruciating and consistent techniques of 'light' torture employed, such as only being able to sit/kneal and lay in two positions almost every bit of all 24-hour periods and being unable to communicate with anybody. It is a mental solitary confinement, and if I witnessed some parent treat even an "unruly child" the way the Japanese system treats those in their custody, I would see pink mist/red cave and be sent off to prison for a long time myself.
Zimbardo's prison experiment decades ago should have indicated to us that we are experiencing dozens of holocaust-tier human rights crises (sans the mass deaths) every year these things continue to operate in current form.
If you can't treat them as human in prison (partial autonomy, dignity), then you are saying they are criminally insane. If they are insane, they need to be in an assylum and not a dungeon (assylums had {and may still have [idk]} their own serious issues too). Prison should never be punitive, that is partially killing someone to punish them. Deterrence Theory is century old bunk we tell ourselves so we don't feel bad for Uncle Ned possibly being equivalent to a camp guard in a massive human rights quagmire made trying to address a millennia-old problem.
Wow, this turned into a rant! Time to smack submit, push the hemorrhoid back up, flush, and be done! :^)
I guess we can anticipate a huge spike in donations to the Democrats as people realize that they can get 25 years of prison time for the bargain price of a few million dollars.
Is it possible he gets a pardon from Biden? Apparently Ross Ulbrecht who is arguably much more serious crime, was close to getting a pardon from Trump (he seriously discusses it with his advisors at least and expressed sympathy)
Yes, it is extremely backwards. The prison system in the US (like vehicle and environmental regulations in the US) exemplifies how little the culture there values human lives and lifespan.
A plausible alternative is that the culture in the US puts considerably more value on the lives of the victims and assigns nearly zero value to the life of the criminal. Arguing that people should "please think of the criminals" is a non-starter.
Legally, Brian Peck injured two victims. SBF arguably injured far more than that (especially if you assign even partial responsibility for the suicides of people he victimized).
I was under the impression his crimes were entirely financial in nature, whereas in my mind the sexual exploitation of minors is several orders of magnitude worse than financial losses.
As other people have pointed out here, he has the possibility of getting out in 12.5 years.
That means he might miss his chance to have kids. Having your first kid at 38 is old, I should know.
That means, ironically, he will be prevented from self imposed financial ruin, which is to say, trying to raise children in the US, especially as someone who came from the opulence of the bay area. Can you imagine the cost of trying to keep up with the Joneses when those are your peers.
It seems like a fair punishment for him would actually be to force him to have kids and have to work as a janitor in silicon valley until they graduate from community college. That would really be teaching him to experience the financial ruin he imposed on others.
Maybe if he had taken some responsibility and demonstrated remorse? He may have felt he was too smart for this situation and could continue fooling people?
I think that would be a hugely unpopular move, for essentially no benefit (he doesn't have any more money to donate), and would be one hell of an unforced error on the part of the democratic campaign.
Well, he gave just as much to the other side, why would the sitting president be inclined to pardon him as some kind of favor? Especially in an election year. That would be political suicide. Won't happen. He has a much better shot if there is a new guy in the hot seat in 2025. But even then I'd say it's pretty remote.
25 years is an exageration to be honest, there was never criminal intent, if anything there was too much belief in their creature, less like Madoff and more like the Long Term Capital Management guys. I don't remember them serving a single day in jail.
It goes to show that judges and prosecutors are just trophy hunters for media attention these days, as proven by the 1000s of proceedings against Donald Trump which costed millions of dollars and recovered exactly 0 dollars.
In any event this goes to show that if you are on the spectrum and can't empathize you should RUN at the first sign of things going south. This guy was in the Bahamas too, from there you can reach Cuba with an Inflatable Rib with a 40hp motor, South America too, St. Kitts and Nevis too which doesn't have an extradition treaty and is the place that many real criminals call home.
I don't know if your questions are rhetorical, but they are easy to answer so I looked them up for you. These are only the prison sentences and do not include court-mandated restitution.
Jordan Belfort: 4 years (served 22 months)
Elizabeth Holmes: 11 years
Mt. Gox guy: I do not know which guy you refer to. Two Russian men were indicted for the actual Mt Gox hack. Separately Mark Karpeles was sentenced to 2 1/2 years, suspended sentence, in Japan - but only for record tampering. He was found not guilty of embezzlement. This entire saga seems very very far removed from what SBF did.
Billions of dollars of fraud that took years and hundreds of thousands of dollars in lawyer fees to prove should have a sentence that is a strong deterrent to future crime probabilities.
The next SBF will not think about SBF even if he knows about SBF. Deterrence Theory is back-justification to make yourself feel good about the crime that is going to happen to SBF for a quarter century just like millions of others today. This isn't living in a Motel 6 like apartment working at an Amazon warehouse for 25 years never making enough to save a dime despite putting in 50+ hours on average, with no economic hope of escape (a hell by most people's standards here); this is locking him up like an animal in abysmal conditions that would never pass public scrutiny if we designed zoo enclosures as such!
If we continue to run prisons the way we do in America, all sentencing needs to go through a strong base log function, and be strictly concurrent.
Excessive. It's not hard to take away his ability to do harm again, he is not a threat to society. In fact, put him to work righting all his wrongs. This judge and sentence a waste of taxpayer money.
"Four major goals are usually attributed to the sentencing process: retribution, rehabilitation, deterrence, and incapacitation. Retribution refers to just deserts: people who break the law deserve to be punished. The other three goals are utilitarian, emphasizing methods to protect the public."
Given the scale of fraud, the money involved, and the nature of SBF at trail, I would disagree.
Been following SBF for a long time and this quote my local rabbi told me once comes to mind:
"spxneo, if you deceive people that demands to be deceived, you will be rich. if you are truthful with those people that demands to be deceived, you will become enemies. if you are truthful with people that demands truth, you will be neither friends nor enemies and poor."
maybe but you wont get to keep it because the people you fooled will try their best to not let you have it which is what happened to SBF. I'm trying to point at the analogy to crypto here. everybody believed in something that wasn't but badly wanted it to be true. somebody sold them that false reality and the capital moved from people who were living in a false fictional reality to people who never left this reality.
Considering the multitude of charges, this is actually pretty low. It appears he was sentenced to a less-than-full term for each of the charges, to be served sequentially (since if the sentences were served simultaneously, the total actual term would be much less than 25 years).
We'll know more in about an hour.
EDIT: Actually, the Verge has already reported:"The judge applied a 240-month sentence and a 60-month sentence to be served consecutively."
I am puzzled by the concept of simultaneous sentences. Is "simultaneous" just a complicated way of saying "you get the max of the two numbers"? Because it's not like you're in a prison cell inside another prison cell. If I'm carrying 2 suitcases simultaneously, that's harder than carrying one at a time. But 2 prison sentences simultaneously is not harder than one sentence.
Am I the only one who feels like they basically got a patsy and whoever was actually running the con while he was playing LoL during meetings got away scot-free?
25 years seems excessive. Funk, for murder they get 10 years in Sweden. Yes, fraud is bad but he didn't kill nobody. I think 5 years would have had been enough.
You could also think of it as 11 minutes each for defrauding each of 1.2MM people. I don't know whether either of those sentences are good ones, but there does come a point at which a narrow violent crime should be punished less than a huge non-violent one. FEMA uses about 7.5MM for a human life for certain cost-benefit analyses (much lower values are used in many of the countries where most FTX customers lived): is there a sense in which doing a billion dollars of damage is in certain ways comparable to 130 killings? Surely some people who lost money would have used that money in part to save someone's life.
Everyone has only 1 life, imprisonment of a life is one of the ultimate forms of torturing. This basically is killing his most meaningful years away.
I can only agree this form of imprisonment for murderers, rapists, ones who physically and mentally hurt people with permanent losses.
Ones can argue that he mentally & physically hurt others, but we need evidence. We should have a better system to force these individuals to pay back or make up the losses. Of course, he will never be able to pay back all the losses, but at least that's a better punishment and I'm almost certain every prisoner will agree to do. They will absolutely trade all of their finances for x years in exchange for freedom.
I think what's going on right now isn't deterring people from committing frauds like SBF either.
I think imprisonment doesn't make it's one of the fairest penalty. A set of humans made that up to imprison/strip away freedom/rights of other humans. No human at birth signs these laws, it is all made up by the people with power.
I agree that creating a system to force him payback is challenging, there's no easy way to create a system like that. Maybe something as simple as 50% tax to start with for the rest of his life as long as he belongs to this society.
Personally, I think we should offer prisoners corporal punishment alternatives. Flogging every six months for ten years, plus fines, plus community service, plus you can't handle investors money or be in the c-suite or start a company, and you pay double taxes seems fair to me.
This type of imprisonment is just as much to scare other people as it is to punish him. Repaying the people he stole from is also required here, but that has no meaning as a deterrent.
If he’s eligible for parole at 1/3 of a 25 year sentence, he will spend anywhere from between 8 years, 4 months in prison or 25 years. That would make him somewhere between 40 and 57 when he gets out.
This is a federal sentence, so there is no parole. The most time off you can get in the federal system for good behavior is 54 days per year of sentence, so less than 4 years off for SBF's 25-year sentence.
> If he’s eligible for parole at 1/3 of a 25 year sentence
He is not; there is no federal parole (for people sentenced ib the last ~37 years.) There is “good conduct time” that can reduce time served to not less than ~85% of the time sentenced, so around 21 years minimum.
Well, its a little more complicated, and depending on the degree of release you are interested in. He could be “out” either a year earlier than I said in the above, or in half of his total sentence:
That's from 1984, federal parole was abolished in 1987 (though people sentenced before 1987, IIRC, remain eligible according to the rules in place at the time.)
SBF was sentenced somewhat after 1987, so those rules don't apply to him.
To be honest, isn't 25 years too much? He didn't beat or kill anyone, he simply found dumb people and took little of their money. It is not like he was robbing poor people by increasing their utilities bill every year or raising rent. Why is such a small, non-violent crime so severely punished? Of course he deserves a punishment but maybe not that much?
As the article says, it sends important message. And he does not serve 25 years.
I don't know how it is the US, but in Finland people get relatively longer sentences for financial crimes because long sentences have inhibitory effect for money crimes.
Most violent crimes happen without premeditation by people without impulse control and longer sentences don't actually reduce crime. White collar criminals weigh the costs and benefits and do their crimes in cold blood after long time of planning.
If you make a scammy-looking cryptoexchange and promise I will get rich if I invest, you won't be able to steal a single cent. Only dumb people can believe that you can buy cryptocurrency and get rich without doing nothing.
But poor people suffer much more from raised rent than rich people from losing little money on dubious cryptocurrency investments. If the punishment was based not on absolute dollar amount but on damage relative to person's total amount of money then it would be more fair.
I don't understand why we need to put this guy in jail for 25 years. Similarly, Bernie Madoff, whose crimes were far worse, was sentenced to 150 years.
For stealing money! Given that the risk of repeat offense is low, I just don't see the point of these sentences. I think they're mostly about notoriety. Meanwhile murderers and rapists get less time, and they're at high risk for re-offending.
> Given that the risk of repeat offense is low, I just don't see the point of these sentences.
Is it? Did he even admit to criminal wrong doing? The article thinks otherwise:
> Judge Lewis Kaplan, just before announcing Bankman-Fried's 25-year sentence, said there was a risk "that this man will be in a position to do something very bad in the future, and it's not a trivial risk."
> Bankman-Fried acknowledged his mistakes and said he was sorry for what happened to customers but "never a word of remorse for the commission of terrible crimes," Judge Kaplan said.
His likelihood of re-offending is low because he now has a near universally bad reputation and so is much less likely to be trusted with other people's money in the first place.
Whether that means he should have a shorter sentence depends on the purpose of criminal sentences. If the purpose is punishment or deterrence, re-offense probability isn't as relevant, but if it is merely to protect others while he is put away, it is the most relevant consideration.
Adam Neumann _should_ have an atrocious reputation given how he treats other people's money but VCs seem happy to fund his new adventures (presumably assuming they can still make money on the way up before the bust).
There would no doubt be people happy to give SBF the funds to go fleece a whole new herd of victims on the off chance he got away with it enough to make the number go up.
It's about deterrence. Imagine you're considering committing a crime. You're looking at the upside and the downside. The equation on the downside looks like this:
risk = size of punishment * probability of being caught.
So how do you deter a potential criminal who is unlikely to get caught? You have to jack up the size of the punishment to compensate for that low probability.
In other words he's not being punished for what he did; he's being punished to dissuade others from copying him. I think people should be punished for their actions and not to increase utility of society.
FWIW, I've read that multiple people committed suicide in despair of the financial ruin caused by SBF's fraud. So he did do things worthy of hefty punishment.
Stealing money may not inherently "feel" like a real crime, because money (especially digital crypto money) is a very intangible hypothetical thing. It does not resonate with our lizard brains like violence does.
However, it is a real crime. And harsh punishments like prison time are needed to remind us of that.
I'm not arguing against retribution. I'm arguing that this particular retribution is not proportional.
In terms of the chance of repeat offense...who would invest money with SBF at this point? It's not like he was mugging people, they voluntarily gave him their money.
It acts as a serious deterrent - if he got a slap on the wrist then it shows that any aspiring crypto scammer can steal millions of dollars and live the high life. You could also argue that the number of people affected by his crimes is orders of magnitude greater than the those affected by the majority of crimes, and would therefore justify such a much greater sentence.
Maybe think of money as embodied energy. If you realize that he stole 15 years of retirement from thousands of people then it may make more sense. 15 good years of your life turned into 15 bad ones, repeat thousands of times.
The judge felt if the sentence were too short he'd do it again.
Also - the real reason he's getting such a heavy handed punishment isn't because he stole money, it's because he stole money from the rich and the powerful.
It's a deterrent for other would-be white collar criminals. The punishment should match the magnitude of the fraud so it indeed does deter in proportion.
As Rick Heicklen writes, "We are not ever going to be Sam. But we could be Caroline, or Nishad, or Natalie. Or even Michael Lewis. We could easily make the same mistakes they do." [0]
[0] https://asteriskmag.com/issues/05/michael-lewis-s-blind-side, posted previously here: https://news.ycombinator.com/item?id=39118124